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"Retail's Innovation Problem"

· Innovation,Retail,Entrepreneurship

Interesting article was recently written by the folks over at Business of Fashion: www.businessoffashion.com/articles/opinion/retails-innovation-problem

Don't want to read the whole thing? Below are the top reasons why retailers can't innovate, according to the author, Doug Stephens:

1. Innovation Versus Iteration - leadership must understand what innovation really means, in order to execute on it. Disruptive ideas are not pursued - instead, executives would prefer to stay in their comfort zones, continuing along a well-defined "innovation" path. Not gonna work.

2. Fear of Failure - see #1. Executive leadership tends to focus on the status quo, and come out of the gates with a "NO" answer. Same lines as "Guilty until proven innocent." Additionally, "many organizations encourage their executives to be innovative but then structure their compensation and reward systems solely around success and compliance." I couldn't say this any more effectively, hence the quote.

3. Vertical Benchmarking - stop comparing yourself to other retailers; you are doing an extreme disservice to your company. "The problem with this thinking is that consumers no longer compare their experiences vertically within a given category. Rather, shoppers are now asking why their apparel buying experience can’t be as easy as their Uber ride, their Airbnb booking or their Genius Bar appointment." This is just as true for retailers as it is for insurance companies, financial institutions, etc. While Fidelity is comparing itself to Vanguard and even E-Trade, RobinHood is busy stealing everyone's lunch (valued at $5B+!).

This also rings true for startups that provide UX layers that sit on top of more traditional companies. Think Stash App, Acorn App for financial, and Lemonade for insurance....

4. Leadership Culture - see #2. "many such retail leaders breed an organizational culture of convergent thinking that seeks only to solve problems in a systematic way."

5. Misunderstanding Creativity - news flash: the "creatives" in your company? They probably aren't all that creative. "The first step for many companies should be to deepen their creative bench and this begins with hiring demonstrably creative, divergent thinkers.​"

 

Looking to hire a divergent, creative thinker for your brick & mortar retail company? Hire someone from an e-comm retailer! Need a fresh take on your insurance biz? Hire a retail vet who understands customer experience in a different setting.

*Somewhat related note: according to an article from Harvard Business Review, your "rock star" employee that goes well and above their metrics of success? Looks may be deceiving when you look holistically at their return to the company: "20% of organizational “stars” don’t help; they hit their numbers (and earn kudos for it) but don’t amplify the success of their colleagues." Be on the lookout for individual achievers that only care about themselves and their own success; they can be toxic.

6. The Urgency to Innovate - innovation moves fast, and expectations of your customer will always be more advanced than you can provide. Desperate to build a new path to innovation? Stop planning and just start!

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