Leading retailers are formally investing in innovation, according to a new study by Altimeter Group.
The report, titled “Leading Trends In Retail Innovation,” uncovered five commonalities among top retailers:
- They constantly map the customer journey to create frictionless customer experiences.
- They invest and engage into deep consumer research.
- They prioritize innovation to target connected consumers.
- They cultivate the necessary digital skills to build a future-ready organization.
- They invest in formal innovation programs.
“Innovation is playing a role in how enterprises break free from the iterative organizational model that they have been using to date to really transcend these slow- moving, slow-reacting, often political, and incredibly siloed approaches,” said Brian Solis, principal analyst at Altimeter and author of the report. “Innovation is a nascent skill set within most brands, which is why we see so much disruption in terms of how organizational models operate in retail.”
Which brands are getting it right? Altimeter highlights Samsung’s “837” concept store in New York City, where shoppers can try out the latest VR experiences and smart-home devices, as an example of disruption to the legacy retail model. They also can take classes, such as photography, and attend lectures by high-profile leaders, such as Arianna Huffington.
Altimeter calls this the “experience-first” retail future, where stores aren’t necessarily trying to sell anything but instead encouraging visitors to explore.
In addition, Altimeter highlighted Target as a best-in-class example of a brand using mobile tech to innovate in-store. For example, Target’s app uses GPS to help shoppers locate items in the store. The app also works with beacons that alert shoppers to specials as they move throughout the aisles.
Neiman Marcus is also cited by Altimeter for its iLab innovation center, launched in 2014 to help the retailer bring its in-store experience to the digital world. This ideology resulted in the Neiman Marcus “Memory Mirror,” which gives shoppers a 360-degree view of themselves in an outfit, and enables them to share it with others right from the dressing room.
Other retailers with similar innovation labs include Ikea, Staples, Home Depot, Lowe’s, Sephora, Gap, Target, Sears, CVS, Walmart, and Kohl’s, according to Altimeter.
“The most progressive retail brands are very customer-centric,” Solis said. “They aren’t just looking at the traditional customer journey; they are redesigning the customer experience for the new, hyperconnected customer.”
Additionally, the report found that many top retailers are looking outside of their industry for new leadership and talent. The report cites Westfield Malls as an example. Many of its employees come from the product management discipline, hailing from such companies as Amazon, Yahoo, and CNET.
What else separates the leaders from the laggards? Click here for the full report.