Retail Innovation and Mistaken Identity: Part 1

By Gareth Jude | Feb 11, 2019 | 0

Do you ever get mistaken for somebody that’s not you? It used to happen to me a lot. One day, when I was much younger, I was at Leeds railway station in England waiting for a connection. A very attractive Spanish lady kept looking at me. Normally I would have been flattered, but these looks weren’t endearing. In fact, if looks could kill I wouldn’t be writing this now. After a while she came up to me and gave me, what they call in the North East of England, a “gobful”. I only understand a few words of Spanish, but I got the drift and the drift was how dare I not speak to her after all we had been through together. I replied, in English, that I was sorry but couldn’t speak her language. Her face dropped and went from red and fiery to white and deathly. She had clearly mistaken me for somebody she knew well. She stared at me again, then apologized in English and went back to her place on the platform, occasionally giving me a double take as if she still couldn’t believe what she had just seen. 

Retail Innovation often gets mistaken for things that it’s not. It’s not new technology, new store design or cost cutting unless it follows the golden rule i.e. it solves a customer problem, does something positive for the business and aligns with your purpose. The shock of recognition when retailers realise what they thought was Innovation is in fact just something that looks like Innovation is just as bad for them as it was for that Spanish lady on the railway platform all those years ago. Why do we have so many cases of mistaken identity in Retail Innovation and how can we guard against it? In this article we’ll talk about technology and in part 2 we’ll talk about design and cost cutting.

Technology

The NRF Big Show is a great place to see the best retail technology the world has to offer and it’s impressive. Imagine you have just come back from the Big Show where you’ve seen some digital technology that’s going to transform the way you communicate with customers in store and at the same time gather valuable data that will help you serve them better in all channels. You conduct a trial and the technology works beautifully, customers react positively, and it aligns with your purpose of offering customers a blended digital and physical experience. You think you’ve just found Retail Innovation, but you soon find it was a case of mistaken identity. The trial is unsuccessful. It’s unsuccessful because the resources required to keep developing content, analyzing results and developing new campaigns after the trial are not available internally and cost prohibitive if sourced externally. This should have been known before the trial started but too much time was spent on the amazing technology and not enough time on what outcomes it could deliver for the business.

Trials of innovative technology that work technically but don’t roll out plague our industry. I know of one company in Australia who have deployed over 50 trials of a very impressive technology but failed to gain a single full chain roll out. This is a tremendous waste of resource and opportunity for both tech company and retailer. The most common problem is that trials tend to be sold on the features of the technology not the benefits to the business. When business issues arise mid-trial, it looks like bad management not to have considered them earlier. Unsuccessful trials therefore become too embarrassing for many retail managers to re-visit.

Technology can be a marvelous facilitator of Retail Innovation as we have seen over the last couple of decades. At Wal Mart RFID has facilitated better in stock for customers, lower inventory costs for the business which in turn has allowed Wal Mart to support its purpose of low prices. At McDonald’s, free Wi-Fi has provided an extra reason to visit the store for customers, increased dwell time and a new customer communication channel for the business and alignment with McDonalds purpose of being their customers’ favourite place and way to eat and drink. The internet itself has facilitated perhaps the greatest changes to retail we have ever seen making infinite amounts of product and services available to customers anywhere anytime, allowing retailers to reach customers outside of their physical footprint and trading hours as well as allowing a host of new formats to develop. With mass adoption of smartphones, IOT, AI, blockchain and much more efficient ways to store and manage data we may be living in the most exciting era ever for retail technology. But technology is still just a facilitator, it’s not Innovation in itself. To ensure we don’t mistake technology for Innovation we should always apply the golden rule upfront i.e. does the technology solve a customer problem, do something positive for the business and align with your purpose? If these questions are answered positively then many more technology trials will be successful.

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