Three Key Takeaways from the Retail Innovation Conference
Last week I had the pleasure of attending the Retail Innovation Conference put on by Retail TouchPoints. For two days, top retailers gathered to discuss how they are handling this time of tremendous evolution in the retail industry, and share how they are striving to constantly innovate to meet the ever-changing needs of the customer. Looking back, there are a few key themes worth sharing.
Takeaway 1: To be successful – you must first truly know your customer
In what should be no surprise, the point emphasized in every session I attended is that to be successful, retailers must truly understand their customer. Innovation for innovation’s sake will not be successful, but innovation for a targeted customer has the ability to attract new buyers and keep your current customer base loyal. When looking at many of the current trends impacting the industry today – things like personalization and customer experience – they all center on the ability to understand the needs, wants, and value of your customer.
Takeaway 2: Today’s innovation must be personal
Look at any retail publication today and you can probably find a handful of articles on personalization. It’s clearly top of mind for retailers and a challenge that retailers are looking to solve daily. When innovating, it’s not enough to simply know your customer – retailers must tailor their interactions all the way down to the individual level and be impactful and relevant at the right moments in the path to purchase. My favorite example from the week is hearing from Aaron Nilsson of Carhartt’s Digital Experience team on how Carhartt personalizes their landing pages based on local weather of the shopper – if it is raining, you will likely see raincoats. In this environment, market-leading brands will be the ones that ensure that any time a customer could even be thinking about their products or services, they will be getting the best possible personalized experience.
Takeaway 3: There’s no time like the present
I think Steve Dennis put it best in the closing of his keynote session when he leveraged a Chinese proverb – “The best time to plant a tree was 20 years ago. The second best time is now.” We heard a great idea after great idea, and we heard retailer after retailer present on the actions they took to improve their brand. They all had one thing in common: they took the first step.
How to put Retail Innovation into Practice in your Organization
While all these themes resonated quite well with the audience and gave the group tangible examples of innovation at work, I felt like there was something missing – how to get started. So, I sat down with Nadim Yacteen, associate partner in Clarkston Consulting’s management consulting practice, and leading expert in strategic innovation, and asked him a few questions to get a feel for how retailers should practice innovation, and do it successfully.
So, you’re a retailer walking out of the conference and you decide you’re going to be innovative or reinvigorate your innovation process. What’s the first thing you should do?
Nadim Yacteen: The first thing that any brand or company who is looking to innovate must understand is what the challenge is that they are trying to solve. Giving a blanket speech to the company about how you’re going to be more innovative is fine, but understanding specifically where and why you are going to innovate is critical. Retailers are being faced with plenty of threats and challenges, and identifying which one or two need to be faced head-on before adverse impacts are felt is vital to not just innovate, but target your innovation in an area that is going to bring the greatest return.
What is one mistake that you see retailers making when it comes to innovation?
Nadim Yacteen: Well, in addition to what I just mentioned about not framing the problem that you are trying to solve, another mistake is thinking that your strong relationship with the consumer is enough when looking to innovate. Consumers are changing, but they are still the most valuable equity a brand has. Product innovation is great, but in today’s world competition is so fierce and product life cycles are so short that simply innovating around your product is not enough. Regardless of where you focus your energy – connecting everything back to the customer is critical. Amazon is dominant not because of the product, but because they are obsessed with making things easy for the customer.
Can you give one impactful change that an organization needs to make to kick-start or refresh innovation?
Nadim Yacteen: Strategic innovation cannot be an afterthought. Not only does it need to be understood at all levels of the organization, but there must be leadership alignment for there to be any success. There are a few steps that retailers can take to facilitate innovation within their organization.
- Separate strategic planning and strategic innovation, and annually carve out a small percentage of your top cross-functional team’s time for strategic innovation
- Change the way you brainstorm
- Set a regular time for teams to exchange insights from elsewhere
- Give people a specific problem and charge them with bringing ideas to the meeting
- Change the way you evaluate ideas:
- Evaluate the problems your ideas solve and broaden the sources of information you are building inspiration from