GLOBAL FEATURE
Innovation
Innovation in retail is often viewed through the lens of competitive differentiation . How can a retailer improve the customer experience by developing new products and services that no one else has or cut costs by achieving greater operational efficiencies ?
However , innovation is also vital to the employee experience . Research from Culture Amp shows nearly 8 out of 10 highly engaged employees regard their companies as having a culture that nurtures innovation . In comparison , only half of the leastengaged employees feel the same .
This makes sense , given companies that value innovation generally encourage team members to contribute ideas and think creatively , experiment and make mistakes and support continuous learning and open communication – factors that can lead to a higher sense of job satisfaction and fulfilment .
So , what does building a best-in-class culture of innovation look like in retail ? It may surprise some people to learn that it ’ s not about having a lab with a cool-sounding name , like Walmart ’ s Store No 8 or Ikea ’ s Space10 , two high-profile innovation labs that coincidentally ( or not ?) closed earlier this year .
“ You need to provide just the right amount of structure to set boundaries and then allow freedom ,” Culture Amp ’ s Hamman said . “ As soon as you start trying to ‘ canvas board ’ everything and create a business proposal for every single idea , that ’ s where it ’ s hard .”
For some retailers , this could mean holding one hackathon a month while , for others , it might entail defining the business ’ challenges and agreeing on a channel for actioning ideas .
“ I just know what doesn ’ t work ,” Hamman said . “ Setting up formal innovation teams with loads of structure and innovation , abiding by the same rules as regular performance work , which means it has [ objectives and key results ] OKRs , it has deadlines – all those things stifle innovation .”
Instead , retailers may want to consider following the lead of businesses like UK department store chain Marks & Spencer , where team members can share their ideas and thoughts directly with CEO Stuart Machin via text message . Four months after launching the ‘ Straight to Stuart ’ initiative in 2022 , Machin said he had received almost 4500 ideas and over 100 had been put into practice .
Similarly , when Adidas CEO Bjørn Gulden was appointed in January last year , he shared his personal mobile phone number with all 60,000 employees . It was not only a way to build trust with staff after the company ’ s turbulent breakup with Ye , but also gave them an easy avenue to provide feedback to leadership .
Finally , most experts agree that a few fundamentals are vital to innovation in the workplace .
Who is doing it well :
Amazon Amazon has rightly earned a global reputation for innovation in retail . The company ’ s relentless focus on the customer and refusal to accept the status quo has not only translated into enormous financial gains but also made it one of the most sought-after places to work in retail .
In a blog post explaining its culture of innovation , the company stated that “ everyone at Amazon is a builder , and everyone is here because of their desire to deconstruct , and create , on behalf of our customers ”.
This speaks to the importance of hiring and developing the right people and empowering them to chase big ideas .
Amazon actively encourages its managers to recognise exceptional talent and move them throughout the organisation , leading to broader skill sets and fundamentally breeding big thinking and best-practice sharing .
Another key component of innovation , Amazon said , is having a long-term view of success – and failure .
“ To invent , you have to experiment , and if you know in advance that it ’ s going to work , it ’ s not an experiment ,” the company stated . “ Most large organisations embrace the idea of invention , but are not willing to suffer the string of failed experiments necessary to get there .”
Notably , the e-commerce giant is a proponent of a less structured approach to innovation : “ At Amazon , innovation doesn ’ t take place during a moment in time – like a hackathon or an incubator – it takes place as part of everyday work .”
• Trust : For employees to feel comfortable thinking outside the box , companies must show that they trust their teams and won ’ t criticise their ideas or punish them for making mistakes .
• Collaborate : Bringing together diverse perspectives and skills from across the customer journey is key to innovation in retail . Frontline staff , in particular , are an invaluable resource , so empowering them to share ideas and feedback with the head office is important .
• Test and learn : To encourage experimentation and minimise risk , businesses should take a test-and-learn approach to new ideas . Pilot them on a small scale before deciding on a wider rollout .
20 www . insideretail . asia August 2024