What does innovation mean to retailers and brands?

Discussion
Photo: Made.com
Mar 12, 2019
Patricia Vekich Waldron

What does innovation mean for your brand?

That was the first question I asked industry executives as I moderated panel discussions at The Retail Summit inaugural event in Dubai. All the panelists represented lifestyle brands – Made.com, Klasha.com and HEMA. None were U.S.-based. Each identified market opportunities on which they sought to capitalize.

Here’s how these brands are applying innovation in areas of their businesses to connect with customers, fulfill on-demand and drive growth.

Inspiration

Made.com is a born-on-the-web disrupter, impacting the furniture industry by offering high-end lifestyle furnishings for a fair price. When made.com opened its interactive showroom in London, it made sure it represented its brand promise. It’s beautifully laid out, featuring attractively staged scenarios, curated displays and intuitive ordering to inspire (and enable) customers. My favorite features were the swatch bar and the interactive design stations.

Fulfillment

Klasha.com is bringing affordable fashion with fast delivery and easy payment options in local currencies to women, aged 18-28. An e-commerce platform serving the Millennial marketplace in seven African countries, Klasha is offering one- to five-day delivery to tier one and two cities, as well as to rural locations. This gets goods into the hands of customers quickly while differentiating Klasha from others in a market where typical online fulfillment can take up to 20 days. Purchases from Klasha often find their way onto Instagram.

Sustainability

HEMA, one of the Netherlands largest chains, operates 700+ stores in nine countries and sells 30,000 own-brand lifestyle, food and home wear products. It combines sustainability and scalability to provide innovation at scale. For example, its rompers (baby onesies) are made of sustainable cotton, organic cotton and FSC bamboo, which cause less harm to the environment. HEMA details the creation process to families via promotions and in stores with a digital activation that takes consumers on a 360-degree production journey via video, smartphone and a VR headset or goggles.

The world is full of clever brands that are identifying market opportunities to widen their reach, attract customers and grow in new markets. There’s plenty for U.S. retailers to learn outside of North America.

DISCUSSION QUESTIONS: What do retailers and brands need to do to define what innovation means to their organizations? What retailers do the best jobs of communicating their individual brand innovation?

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"Amazon and their relentless 'it’s always day one' approach to innovation is the gold standard that has set the bar so high for both digital natives and retailers."

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17 Comments on "What does innovation mean to retailers and brands?"


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Paula Rosenblum
BrainTrust
This is really hard for American retailers. Completely trained to “do what the Street wants” they tend to be risk-averse and avoid anything that might change their brand economics or otherwise alter metrics that “the Street” thinks is important. Innovation starts with someone owning it. It’d be nice if that was the CIO, but somehow that role seems to have been relegated to “chief plumber.” So once someone actually owns innovation, then that person has to engage in some visioning. Our data (from our report on Innovation last year) shows us that most innovations in retail actually come from employees themselves. Consultants can help, but it’s way better to bring it from within. And if you include people on the front lines, they’ll probably give the best ideas on how to communicate to shoppers. Of course, I have to ask the question: If you need to figure out how to communicate an innovation rather than let that innovation speak for itself, is the innovation even all that in the first place? A really cool innovation… Read more »
Zach Zalowitz
Guest

Paula nails it here. Innovation is from within. Outsiders can help get a framework in place and spur conversations, but it comes in hiring the right people and not yielding to macro pressures that too often put innovation projects on the chopping blocks first.

Min-Jee Hwang
BrainTrust

Innovation is great, but it can’t be innovation for innovation’s sake. Any business must truly understand its audience and what they want out of their preferred brands and retailers. Then innovation can be tied directly to a need in the market. As mentioned, innovations like sustainability, shipping, and assortments are all great if that’s what shoppers want.

Lee Kent
BrainTrust

Absolutely! I always say, look at your top 10% and make sure you fully understand their shopping journeys, buy motivators, pain points and especially what is missing to bring them to yes! That is where and when to think innovation. For my 2 cents.

Charles Dimov
BrainTrust

Some of my favorite retailers that do a good job of positioning distinctly are:

  • H&M (love their sustainability efforts);
  • IKEA (continual clever and practical innovations);
  • Walmart (starting to gain traction in BOPIS and e-commerce);
  • Browns Shoes (clever use of Dynamic Inventory Visibility).
  • Retailers need to focus on an aspect of their brand. Then really put effort behind that particular aspect. Naturally, if that aspect, let’s say sustainability, is important to customers — then you have a home run.

Brandon Rael
BrainTrust

The term innovation has been thrown around so much that it has essentially replaced omnichannel as the latest retail buzzword. However, driving purpose-led innovation initiatives are critical to help enhance and improve the overall customer journey and experience. Amazon and their relentless “it’s always day one” approach to innovation is the gold standard that has set the bar so high for both digital natives and retailers.

Brands and retailers know that they have to drive innovation initiatives, but it’s not a simple proposition. Companies are challenged to keep the business operation going while driving incremental innovations at the same time. It’s a delicate balance, however, so it’s necessary to keep the innovation train going as the commerce world and the customer base is continuously evolving.

Aside from announcing innovation initiatives to the company shareholders, customers are really indifferent to these announcements. Yet customers will be the first ones to notice when the cross-channel Macy’s, Target, Coach, Nordstrom, etc. experience improves.

David Weinand
BrainTrust

Retailers must frame innovation exactly how the question is asked – they must define it with respect to their organizations. “Me-too” innovation is not going to fly in this day and age as consumers are too smart and most importantly, every organization is different. Also, innovation doesn’t have to be grand and expensive – labs are not for everyone. Incremental innovation can prove tremendously valuable when ingrained as part of the culture of the organization. Look at what Walmart is doing with pick-up/return towers, curbside pickup, etc. Other retailers such as Warby Parker (democratizing the eyeglass buying process) and Zappos (returns) have innovated their way to great success as well.

Mohamed Amer
BrainTrust

The value and starting point of innovation resides firmly in the customer perspective. Sure the consumer may not have known that they needed an iPhone a dozen years ago, but you can’t innovate successfully without such consideration.

The challenge for most retailers and technology partners is that the starting point is usually a product, collection, or assortment on one side or a set of new technologies. Just as we are experiencing a rise in everything associated with artificial intelligence, we need to also emphasize the humanities and social sciences. That’s the current weak link in turning capabilities-based innovations into consumer-led ones and subsequent communication and adoption.

Doug Garnett
BrainTrust

Today’s buyers bring innovative products to shelves and the stores let them sit there. The result has been cynicism about products — but the problem is they’ve only done half the job.

When customers are told why products are significant, they will fly off the shelf (I’ve driven millions of units of new product in two to three months with the right advertising). Unfortunately, retailers don’t know any advertising other than what their agencies provide which is only brand advertising or “discounts.” And digital efforts simply can’t deliver the outreach communication needed.

Any retailer who embraces this approach with innovation succeeds against Amazon because of the poor Amazon communication environment (remember that innovative Amazon knows this, too — their innovative products are put on TV then sold in stores).

Innovative retailers can establish key competitive strength with programs bringing innovative products to their shelves and ADVERTISING them well. I’ve written more here.

Shep Hyken
BrainTrust

When you see successful innovation in a brand, it’s not the brand telling you about the success. It’s the customer. They do it in their buying habits, their reviews and their recommendations. Take a look at the companies that are mentioned in this article. All of the innovations were focused on the customer’s experience. Some of the best innovators simply learned what the customer wants, and in some cases didn’t even know they wanted, and then gave it to them.

Ralph Jacobson
BrainTrust

Great article, Patricia! Bottom line, retailers must build their brand, acknowledge what that brand actually means to their customers (while avoiding corporate pride-driven misinterpretations of that meaning) and be agile enough to evolve that brand as trends emerge.

Camille P. Schuster, PhD.
BrainTrust

Not many retailers have someone (or a team of people) assigned to monitor retail changes across the globe, changing consumer tastes, and changing marketplace conditions. As a result, retailers often respond to changes after they occur and, with long lead times, appear to be following changes rather than moving with them. While changes in this environment may be innovative for the retailer, they are not perceived as innovative to consumers. Constant experimentation and quick changes with the marketplace are required for a retailer or brand to be considered innovative.

Cynthia Holcomb
BrainTrust

The freedom of starting from scratch. Hours, days, weeks, months of obsessive attention to detailed inspiration evolving into innovation. Mirrored against retail legacy, corporate groupthink, internal politics, and never-ending deadlines. Innovation is an arduous endeavor, requiring more than an idea. Legacy retail and brand leadership rally the cheer to innovate. Internally employees know the drill. Pay lip service, go through the motions, after all, who would want to expose themselves to fight the uphill battle of innovation? Innovation is a cultural attitude, embedded in the organization from the beginning. Most retailers and brands play the game of catch-up innovation. Racing to add the latest technology-driven customer experience offered by the newcomers, Amazon, Walmart and the very few other retailers driving the PR buzz machine.

Ryan Mathews
BrainTrust

Forgive me, but I’m not sure I see the three examples as innovative. Using organic fabrics to attract sustainability-minded consumers certainly isn’t new. Figuring out “last mile” delivery — particularly if you have five days to get the delivery there — isn’t new. And, the idea of selling good quality furniture at moderate prices clearly isn’t new. And — for better or worse — novelty is sort of a prerequisite for innovation. What these companies are doing is exciting, but not because they are innovative, but rather because they are efficient, effective, and living their brand values. Most retailers would be well advised to start where they are first, and worry about innovation later.

Cathy Hotka
BrainTrust

Innovation has to be an every day imperative. Look no further than Payless ShoeSource to see what happens when innovation takes a back seat. It has to be a part of the job description for every title, at every level. This is the new retail reality.

Larry Corda
Guest

Retailers need to figure out how to create an innovative culture and not a process or definition that can impede innovation.

Zach Zalowitz
Guest

Change through innovation is fundamental to company culture, and is more like a cruise ship than a speed boat. Clear leadership top-down to allow the flow of ideas from those closest to the customer, coupled with a fresh perspective from the bottom-up is a winning combination.

  1. Under Armour is a great example of this with shoe-sitting tech.
  2. ULTA is starting to innovate in the AR space but has also invested time and money into bringing in consumers for more than just product (e.g. taking floor space from product and putting in a salon).
  3. Express Inc – Forward-looking and ahead of the curve in my mind in offering fast fulfillment via store-network.
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"Amazon and their relentless 'it’s always day one' approach to innovation is the gold standard that has set the bar so high for both digital natives and retailers."

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