Why retail innovation has never been more important

Why retail innovation has never been more important

By Simon Hill, CEO, Wazoku

Retail is a sector under more pressure than perhaps any other. Bricks and mortar stores in particular are having a tough time, with stationery chain Office Outlet the latest to fall into administration.

Other big High Street names to find themselves struggling in recent months include Debenhams, Patisserie Valerie and Kingfisher, the DIY retail group behind B&Q and Screwfix. There are many reasons why they are finding life hard: Brexit uncertainty, changing consumer shopping preferences, the on-going dominance of Amazon and a failure to marry new advances in technology with traditional retail strengths are just a selection.

It is clear to most in the industry that retailers must adapt and innovate if they are to survive and maintain their market position. With market conditions the way they are currently, there has never been a greater need for innovative thinking and smart ideas to revitalise retail. But are retailers set up to be innovative? Do they have a culture of innovation, and the tools and processes in place to ensure good ideas are brought to the fore?

Any idea can add value

Most retailers have accepted the need for more innovation and many are starting to make this happen. Concept stores, that test concepts and new technologies are relatively commonplace, and some retailers are innovating at a larger scale by introducing much bigger concept stores.

But these are typically much bigger ideas and retail innovation can be found in ideas of any size and scale. A powerful example of this is Waitrose, one of the largest employee-owned retailers in the world and one which prides itself on empowering its staff – or partners as they’re known internally. 

It introduced On the Job Innovation in an initial pilot to six stores, which generated 100 unique ideas in the first three months – compared to 13 ideas in a year across the entire business with its previous methodology. When this scheme was rolled out across all 350 Waitrose stores, 60,000 employees were engaged, resulting in ideas that realised total savings of £3.5 million and 1,500% ROI.

The first year saw approximately 100 ideas submitted by Waitrose partners each month and the winning idea was one that changed the formatting and management of till receipts. By cutting down on the length of till receipts alone, the retailer saved £167,000 annually. 

Stuart Eames, Operational Improvement Manager, Waitrose, feels that smaller ideas are more intrinsic to the retailer’s drive to innovate:

“Small ideas are here to stay, and generally impact and mean so much more to Partners, than the next big strategic change. Therefore using a system that allows any Partner, working anywhere in our business, whether driving a van, restocking shelves or managing the marketing PoS, to submit an idea is very important.” 

Where does innovation come from?

Just as smaller ideas that deliver incremental improvements can have a powerful impact, so it is also true that innovation can come from anywhere. For example, a retailer could involve its customers, local communities, employees and other groups in idea generation. This broader ecosystem of stakeholders would generate much more varied solutions to challenges, especially if there was an overall culture of innovation behind it. 

A workplace culture must encourage and support innovation. It’s a long-term approach of collaboration and encouraging diversity of opinion and those involved must feel trusted and have the time and energy required to innovate. This is dependent on strong and committed leadership, with leaders making it clear they are receptive to new ideas and are willing to take risks and learn from failure. 

This is the type of culture fostered by Waitrose and it is essential for any retailer in the challenging retail environment of 2019. Organisations that are serious about being innovative know that it involves a different mindset to be successful and survive amidst the disruption currently facing the sector. But good ideas can be found everywhere, and whether big or small, can have a transformative and tangible impact for any retailer.

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