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Retail Reply has found that, unfortunately, to most UK retailers the word “innovation” conjures up an image of a disruptive force in their industry. At the heart of the problem is that until recently, retailers haven’t had to be innovative, so they haven’t grown up with the innovation gene. When we talk to a retailer about innovation they have a stereotypical idea of what the word means. Their view of innovation is that it is a process that begins with a new idea.
Thinking of innovation as a linear flow of information is a seductive idea. It’s one that everyone can easily understand and we’re all so used to thinking of processes in large organisations as being linear, that it fits neatly into that model in our heads of “how things generally work”.
The linear theory of innovation may only unravel if someone actually tries it out in practice. They put a box labelled “Bright Ideas” in the corner of the shop or office and wait for their employees’ ideas to come flooding in. In the first month there are three ideas 1) “hire more staff” 2) “pay us more” 3) “get rid of this box”. In the second month there are two ideas, one of them looks promising. So, it is given to a business analyst, but they conclude that there is no ROI, so it gets dropped. In the next couple of months nothing comes in and then the box is forgotten about.
If innovation isn’t linear and doesn’t start with a lightbulb moment, then what is it? Perhaps a better analogy than the straight path is that innovation is a maze. It often means starting down one path, but just finds a dead end, so you have to back track and find another path.
Another point to note about innovation is that it requires creativity. It’s also best fostered in an environment where there is input from people who each think differently. The more input you have from the greater number of directions, the more likely it is that a great idea will emerge.
Many retailers are now looking elsewhere for innovation. They are buying into start-ups under the guise of an “incubator programme” in the hope that the start-ups will provide them with the innovations they need to keep up. This seems at first to be a good idea; if you’re not good at innovation, then why not pay someone who is good at it to do the hard work for you? Well, as with so many cheap fixes, it is may look good at first glance, but it’s not a strategy that passes a closer examination. Incubators may not be a good fit for retailers, because:
Innovation needs to be built into a company for it to work well, but most retailers don’t have this gene and don’t even understand how innovation works in practice. Even when they try to buy-in innovation, it can lead to problems.
What they really need is to find people who understand both their business and understand innovation, who can help them to foster innovation internally. A partner who has experience following those many paths of innovation and guiding the right ones through to market. A successful relationship will result in innovation becoming built into the organisation’s genetic make-up, and become second nature to their employees.
Retail Reply will make sure that the investments in innovation are sustainable and have a real influence on the future of client’s organisation, meaning clients don’t have to speculate on start-ups and individual ideas. With the support of the Reply network, all the organisations will have access to the latest retail thinking, research and hands-on access to new technologies – just what clients need to fuel the new innovation gene.