We’ve all heard it before. “”Retail is different,” “Our pace brings vendors to their knees,” “We have a culture of innovation that keeps us competitive” SCREEECH! Whoa! The last statement (which in some shape or form is in every retailers annual report), is a little stretching of the truth.
I am not saying that retailers don’t innovate. They do. There are scores of examples of retail innovation. TigerDirect gave a ridiculous presentation at eTail East in Baltimore, and BestBuy, Starbucks, Dell, Walmart and Overstock all have innovation programs that are ahead of the curve.
Unfortunately, it has been my experience so far that most innovation in retail is a reaction to changes in the marketplace. Social Media is a perfect example. A few firms (AutoNation, Kohl’s) recognize that engagement with the customer is integral to establishing credibility and managing successful facebook and twitter campaigns (full disclosure, one is a customer, one is not). The reality is that most retailers are just trying to figure out social media and the only reason they are is that their competitors are eating their lunch!
To further my point, let’s look at mobile apps. A good buddy of mine in the space, @shaunpope made an interesting comment about the internet tonight. He said, “It’s dead,” In context, he was referring to the proliferation of mobile applications and that widgets are now driving how individuals surf the web. His opinion was that as a result, traditional search engines like google, will be losing their relevancy pretty quickly. Is he right? I couldn’t tell you. He’s the expert there, I’m not. I can say, however, that the influence mobile shoppers have on retailers is potentially huge! Imran Jooma, Sears eCommerce guru pointed that out in a speech earlier this year! So is Sears innovative, or reacting to changes in the marketplace
So here’s the rub. Retailers are smart, and they get it. Technology and the way consumers buy is changing faster than I can type. To keep pace, they have to react. When they react, the best innovate. But, think about it. Is that kind of innovation healthy? Will it move the needle beyond this quarter’s sales target? I think not.
The best companies in the world budget for, and practice the art of innovation as a core competency. Cisco, Southwest, AT&T, Starbucks, & Dell have recognized that Innovation is something to be invested in. They budget for it, they allocate resources, and they enable their employees. And guess what. If you look at the stability of their stocks, for the most part, their shareholders are reaping the rewards.
Unfortunately, most retailers succumb to their quarterly projections. I am working with several right now that are running idea campaigns that are focused on getting their Q3 numbers on track. I just looked at my watch. I am looking at September 2. Does that kind of innovation really move the needle?
Great Post. I would say many company have the challenge where leaders get caught up in the Tyranny of the Immediate and dig their graves with teaspoons.
ReplyDeleteWhat i mean by this is just as you stated, Quarterly Tactical initiatives Trump Strategic Priorities. Everyone is too busy to focus on game changing ideas or strategies. By not implementing this as a core competency that allows these teams to focus on more that what happens today, they react in incremental fashions and do not capitalize on the Market Transitions others see in advance who do make this a core competency.
The key is how do you change the culture to enable these companies to see doing both as Vital and not just lip service.
Innovators in down quarters are chastised for not focusing on the numbers, then chastised for not having seen the transition. Vicious Cycle.