There is something very particular about tackling topics like innovation in retail. Here, unlike what happens in worlds such as technology, every relevant innovation has to share one trait: it must make it easier for your brand to sell more.

Consider the points we’ll cover below! Retail has never been as diverse as it is today, and it has never offered consumers so many options. Slowly, those options stopped being delivered mainly by brick-and-mortar stores and are increasingly being delivered by websites.

That alone is enough to mean more competition. Today, any retailer has to offer better prices, products and possibilities than its competitors — and those competitors are anyone with a website and the logistics to get a given item to you.

In this context, it’s easy to see why innovation in retail is becoming a more common topic among our peers. Giants in this kind of business, such as American Apparel, have recently filed for bankruptcy because they couldn’t reinvent themselves enough to stay relevant.

In today’s article, you’ll learn why innovation is such an important part of retail. You’ll see which initiatives can be considered innovations and how to apply them successfully to your business. You’ll also learn about some of the risks of innovating and how to anticipate them before they cost you.

Ready to become an expert in retail innovation? Then keep reading!

Why does innovation matter for retail?

Whenever we talk about innovation in sectors like retail, many people stop the conversation right there. That’s because they can’t see how new technologies, methodologies and resources could fit into their business and make the sales process easier. But the truth is that we’re living in a unique moment in human history.

Never before has so much changed! Thirty years ago, owning a phone could be considered a luxury; today we carry one in our pockets and use it to access the internet. Technologies like machine learning, Big Data and drone delivery — something Amazon is already using in the United States — are definitely the future of retail. But not every professional in the field sees them that way.

That’s because we’re used to doing things the way that has always worked. However, we need to be able to tell when things keep being done that way because it’s more efficient, and when it’s simply a sign of complacency.

There are countless resources out there that could help your company sell more right now. To make our point clearer, let’s look at just one of them: Big Data!

Big Data means working with data to gain a qualitative and quantitative view of your consumers’ expectations. It isn’t necessarily new for retail giants like America’s Target or Brazil’s Americanas, but only recently has it become part of the daily work of smaller companies.

That happened because, as has been the case with other technologies, Big Data gained tools that anyone can use. Cloud-hosted databases, instead of a series of physical servers, for example, are one aspect of this revolution. Combined with software like Hadoop, the result was the spread of an efficient technique beyond the world of mega-corporations.

Thanks to these changes, Big Data is the technology we now turn to in order to understand what our consumers expect at certain times of the year, when they search for a specific product, or because they belong to a certain demographic. And that understanding is enough for us to do our work far more efficiently, delivering solutions before a problem even has to be raised.

Using Big Data is a proven strategy for bringing your products and services to more people and amplifying retail results. So why do so few companies in the sector use it?

Because retail culture is extremely attached to its way of doing business. Without disruptive players, or the realization that there are technologies out there that can improve what they deliver, companies spend years and years doing more of the same — and getting very similar results.

Innovation in retail is the only way to pursue the extraordinary. And that should be more than enough reason for you to take an interest in the topic.

What counts as innovation in retail?

We could begin our exploration of the resources most often used to disrupt retail simply by citing success stories from companies around the world. After all, how else could we convince you of the importance of using resources like these?

The fact is that there are a number of technologies that could make your business results stand out. But not all of them can necessarily be considered innovation. Let’s explain the difference in simple terms.

Here, we treat as innovation those concepts that are unique and, at the same time, can be applied to a range of niches with good results. The opposite would be evolution, something that happens naturally because the landscape — and our perspective on it — has changed.

Take, for example, building a website. When no other company had an online presence, this could have been considered innovative. After all, the very concept of e-commerce didn’t exist yet, and betting on a medium that wasn’t widely used at the time was a risk.

Today, however, a website is just one of the things your business needs in order to survive. In itself, it can no longer be considered an innovation. On the other hand, a website that changes things as we know them still fits into that category.

Have you heard of the Guide Shop concept? Guide Shops are places where you can try out products and services before buying them. They are immersive experiences that don’t change the logistics of how a store operates.

After visiting a Guide Shop, you’ll know exactly what you want to buy. And you can buy it on the company’s website, as you normally would. That’s why this approach is considered an innovation: it changes the way we usually approach a problem. The same is true of the other innovations we’ll cover next.

Robotics

Retail marketing is usually the first place we look when we want to spot the most relevant innovations in the field. However, the most cutting-edge and disruptive ideas don’t always come out of that department. Marketing’s role in how a business positions itself is obviously still extremely important, but today we’re seeing other disciplines emerge with ideas that could change the way we do business.

That’s the case with robotics. Once limited to building rovers that roam the universe trying to learn more about its history, this science took on a practical side when it came into contact with retail. And it brought us possibilities we had never even considered before.

Today we can say that robotics is commonplace in retail, as part of logistics and the supply chain. Think, for example, of Amazon, which uses around 40,000 robots in its warehouses to pick orders.

The real revolution we want to discuss here, however, takes robotics in a different direction. Companies like Hudson’s Bay Company made a commitment to expand the use of robots in customer service throughout 2017. The company began bringing these machines into its points of sale and exploring ways a robot could be used to make door-to-door deliveries.

Lowe’s is another major business focused on being part of this shift. Today, in 11 of its stores in San Francisco, the company already has robots specialized in customer service. They can answer questions, show where certain products are located and log complaints.

This is the kind of innovation in retail that makes all the difference and shows what the market will look like in a few years.

Drone deliveries

It’s impossible to ignore Amazon’s innovation case when it comes to drone delivery. That’s because it’s such a different way of doing things that we can easily picture it being rolled out on a large scale by other companies.

Imagine if your pizza orders could be delivered by drone? That would increase the chances of them reaching your home still piping hot and at just the right moment to eat. After all, drones don’t deal with traffic or need a paycheck, which makes them, in a way, the ideal delivery workers for situations like these.

When we buy a product online, we expect it to arrive as quickly as possible, and drone delivery makes that possible. It isn’t limited by post office hours, and it doesn’t require the company responsible for distributing a product to deliver only on business days.

As large companies specialize in drone delivery and turn this technology into something usable by the masses, you may well see this change happen within the next few years. Today, in addition to Amazon, 7-Eleven and Flirtey are already making these kinds of deliveries in the United States.

Can you imagine how your business’s logistics could be impacted by things like this? That’s why we stress how important it is to take innovation seriously.

Anti-fraud technologies

For an e-commerce business to work and fulfill its purpose, you have to invest in security. Here, more than at any other point in the retail chain, it’s the merchant’s job to ensure that only authorized users can use their credit information. That’s why we need to address the impact of innovation on the development of anti-fraud tools.

You’ve probably heard of Bitcoin. The virtual currency started out as an experiment and is now one of the most valuable in the world. Major players are investing in it because they see one of its core features, the blockchain, as a way to develop other kinds of technologies.

The blockchain is a chain of data that guarantees a bitcoin’s authenticity. It contains every coin that has ever been issued, and they’re easy to validate mathematically. Some people in the security field are excited about this.

That’s because the blockchain could be used, for example, to validate every transaction made online and prevent fraud.

How can my business apply innovation successfully?

There’s no shortage of opportunities for your business to put innovation into practice. Technologies like drone delivery or bitcoin-based anti-fraud systems may not be within your reach right now, but they definitely need to start being part of your plans.

After all, everything suggests that as they become more popular, adopting them will feel increasingly natural over the years. Just as happened with e-commerce, the use of robots could become the next big thing when it comes to innovation in retail.

But to put new developments like these into practice, your team first needs to have a very clear mission in mind. You need to create a culture within your company that encourages the use of new resources and celebrates the people who move toward innovation.

The main factor that hinders innovation in retail is, more often than not, cultural. Teams are so traditionally used to doing things one way that they can’t see how they could be done differently.

For your company to become an innovation leader and make life harder for your competitors, it needs to be open to it. Have well-defined incentives for employees who are willing to bring new ideas to the table, and make optimizing the way you carry out even the simplest tasks one of your priorities.

Innovating, in the sense of coming up with a great idea, is within everyone’s reach. But to keep it from staying on paper, you need to shift paradigms and establish ways to reward innovation.

What mistakes should I avoid?

We could make a long list of reasons why innovation fails to succeed in fields like retail. Probably the main one is the fact that we no longer shop the way we used to. For that reason, places like shopping malls aren’t as busy as they were in the past and are no longer central to our culture.

But if we put all the blame for our problems there, we’ll miss other challenges surrounding the retail world that make it increasingly difficult to innovate in this area. After all, online retail also faces difficulties, and not all of them can be directly tied to a lack of potential customers walking through store environments.

It’s online that we see record traffic fail to turn into record sales, by its very nature. Here, people are more likely to drag out the buying journey, making selling a product an even harder task. That’s precisely why we’ll set those kinds of difficulties aside when answering the question, “Why can innovation in retail fail?”

Instead, we’ll look at problems that are common to both types of business, whether online or offline.

Things like innovating without knowing what you’re doing, just because all your competitors are innovating, are one of these problems, and a lack of planning is a natural consequence. Poorly defining your goals, failing to train your team and not considering the customer experience are other deadly sins you won’t want to commit when innovating.

Find out why in the following sections:

Innovating for no reason

The biggest reason innovation fails in retail is starting it without assessing its consequences. Many retailers keep a close eye on their market and draw the obvious conclusion that the businesses that are innovating tend to get the best results.

From there, it’s a short leap to deciding that innovation is the ideal move to pull their business out of a slump. But that may be the biggest trap along the way.

We call this “innovating for innovation’s sake,” meaning adopting new techniques, tools, and methodologies without considering how they will affect your business — just because other people are doing it.

Generally, this is the fastest way to spend a lot of money and get dismal results. So, before innovating, you need to consider every particularity of your business and give a clear answer to the question “why do I want to innovate?” Only then can you take the next steps in the innovation process.

Forgetting to plan

Naturally, once you’ve concluded that you won’t be innovating in vain, a few requirements will come up along the way, the most important of which is creating a plan. Without a plan, all the reasons that led your company to invest in innovation can be ignored without you even noticing.

It’s in the planning phase that you define how the innovation will happen, and over the course of it that you set goals and metrics capable of measuring it. So never skip this step!

Poorly defining your goals

But setting goals and metrics isn’t as simple a task as it may seem on paper. When innovating, your company will face a critical mission: doing things differently in order to achieve an impressive result.

That result needs to be known or anticipated at the moment innovative initiatives are implemented. It will be tempting to test the tools we mentioned in the previous sections and see what they can do for your business. However, your innovation can only work if you know what you want from it from the very beginning.

Failing to train your team

Company culture is a very important aspect of innovation. So much so that, when we talk about it, the topic usually comes tied to so-called “innovation culture.” Innovation culture is basically instilling in your team the drive to constantly create something new.

This can be a big challenge! We know our salespeople and suppliers have their own way of working, but we can’t let that get between our companies and innovation.

That’s why, for everything to go well throughout your journey, it will be essential to train your team in the techniques, methodologies, and tools the business will be adopting. Only then will everyone be aligned and determined to achieve common goals.

Ignoring the customer experience

You’ve probably been in a situation where you saw how innovation could degrade the customer experience. Think, for example, of self-service kiosks, like the ones you see at the mall or in fast-food restaurants.

While these kiosks sometimes work to improve the user experience, making the purchasing process faster, the expected result isn’t always achieved.

But why? Usually because businesses fail to consider the shopping experience their users would like to have when they walk into their store or shopping center. An interactive map showing the location of various spaces in a mall, for example, can completely lose its usefulness if it can’t clearly show, at all times, where the user is.

This is a common mistake that can turn an innovation that seemed positive into a thorn in your customer’s side. Studying what customers expect to find when they interact with your products and services is therefore paramount to innovating as efficiently as possible.

Use the time your team spends developing the plan for an innovation initiative to consider topics like these. After all, ignoring them can complicate your relationship with the customer, the way they perceive your business, and even their ability to purchase goods and services.

See how it’s possible to adopt innovation in retail and succeed? After looking at the points raised here, you should be at least tempted to see how new tools can impact your results.

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