Retail today is all about innovation. Stand still as a brand for too long and your retail offering, stores and brand experience can become stale and out of touch with consumers all too quickly. But innovation requires bravery and leadership and a drive to test new ideas and try new things – some of which will work and some that won’t. It also requires an understanding of where you fit as a retailer – and whether you would benefit from first-mover advantage or whether you are ok to be a fast follower instead.
But how do you decide which strategy to take?
The advantages of first-mover
The advantages of being first-mover in the field of retail innovation are obvious. You steal the competitive advantage and the headlines and hopefully win the customers. Of course, it can be a risky tactic but those retailers who are true innovators are as willing to learn from the ideas that fail as they are to embrace the ones that work.
They are usually businesses that are set up with an agile infrastructure and management structure that allows for swift decision-making and action. Many also have, or are associated with, innovation hubs whose focus is on finding the next big thing. They are also not afraid to test and fail in the pursuit of great new ideas.
1) Amazon: Leader of the pack
The leader in the field of retail innovation is undoubtedly Amazon. It innovates in everything it does – from voice shopping through Alexa to delivery speeds that have its rivals green with envy. But the retail giant doesn’t have limits on what it feels is possible for its business model or the future. The sheer number of patents the company applies for – and the often rather seemingly outlandish concepts they embrace – shows how far the company will push on the innovation front.
2) Burberry: A luxury innovator for some time
At the luxury end Burberry has long-been known as a technology innovator. The retailer was the first luxury brand to sell through Twitter’s Buy Now programme and has been pushing hard on digital and instore technology since introducing a number of new instore technology concepts in its flagship Regent Street store in London in 2012. They included everything from live-streaming to magic mirrors which turn into screens to show how clothes look on a catwalk, enriching both the browsing and buying experiences for its customers.
3) Zara: Bringing fresh ideas to the mid-market
Zara, part of the Spanish giant Inditex, has been shaking up the fashion market ever since it first arrived on UK shores. Earlier this year the retailer opened a pop-up store dedicated to click and collect in Westfield shopping centre in London whilst its normal store was being revamped. The revamped store then opened in May under the tag of being the first ever digitally integrated Zara store. It included two automated online order collection points, interactive mirrors equipped with RFID to detect what items customers are holding to then show the full outfit and a self-service checkout area.
The fashion for being an innovation fast-follower
As we have seen above retail innovation is about trying new ideas and new things to get customers excited and grab their attention. For some brands and retailers being known for innovation is at the heart of their brand – whether it’s setting trends with fashion or improving the customer experience with technology.
But retailers don’t always have to be first mover and pioneers in what they do. Sometimes the advantage is seeing how others fare first and learning lessons from them that you perhaps don’t have the time, resources or ability to absorb risk yourself.
1) John Lewis Partnership
It may seem a little harsh to call the department store and food giant a fast follower rather than an innovator. But innovators take risks and whilst the company embraces innovation through its innovation lab for example, its focus is always on its staff and what will work for them. Instead John Lewis Partnership’s initiatives – from two-hour delivery trials for Waitrose & Partners to piloting a buyback service for unwanted clothing for John Lewis & Partners – are ones that the market has already seen before but are still fresh enough to bring something new to the retail giant.
2) New Look: Doing things better and smarter
Fashion retailer New Look talks about innovation being about doing things better and smarter – it doesn’t have to just be about introducing new things. It’s certainly something the retailer has concentrated on. New Look was an early adopter of unlimited delivery and collection for a set yearly fee with its Delivery Pass, a similar concept to Amazon Prime. New Look has also worked hard on increasing the flexibility of its supply chain to allow for quicker reaction to trends and continues to invest to improve the online customer journey.
3) Schuh: Finding the innovation that fits
Other retailers talk about the importance of adopting ideas that have worked well in other sectors or industries into their own business models – still allowing them to be innovative but with less risk of their first-mover counterparts. It’s a policy adopted by fashion footwear retailer Schuh which warns retailers not to become ‘busy fools chasing every possible innovation’ but to instead focus on the innovations that fit their individual business. From ereceipts to a 365-day returns policy the business focuses on a fast-follower approach rather than being a trail-blazer which allows it to take a more considered approach to innovation.