Innovation in Retail
Article by James Maccan
Retailers around the world can all agree on one thing ? the competition is fierce. In today?s world, often referred to as a global village, advancements in technology, allocation of resources and innovations all directly affect the ever-changing business environment.
In a recent publication entitled ?Retail Innovation Opportunities: Ten for 2010? Retail forward identifies ten innovation opportunity areas with tremendous potential for creating new consumer benefits and stakeholder economic value.
Generally over the past few decades, most retail innovations have focused mainly on the response to mass market opportunities. However, as ongoing technological innovations and operating strategies continue to improve, Retail Forward believes future retail innovations will be more customer-facing addressing the unique needs and desires of customers.
So who has the next big idea? Who is going to just wake up randomly ? dream up a master innovation? Highly unlikely! Potential innovators in the retail industry might what to challenge traditional competition-based strategies and consider a systematic approach to innovation ? Blue Ocean Strategy.
Retail Forward?s first, Catch a Wave. Retailers that apply innovative thinking to a growth souk opportunity created by demographic, societal, economic and technological trends can make major growth and financial performance. The requirements of an aging population, ethnic consumers and the pursuit of a healthy lifestyle give fertile ground for innovative solutions.
Secondly, Solve My Problem. Consumer-centric approach creates opportunities to add value to the shopping experience. This requires adding services, information and support to the product mix to provide a complete solution for task-oriented shoppers. Presenting products in context and bundling products and services retailers create consumer value and competitive differentiation.
Retail Forward?s second idea closely relates to the cornerstone principle of Blue Ocean Strategy which is known as ?value innovation.? Blue Ocean Strategy?s value innovation refers to creating a leap in value for buyers and your company. Value innovation renders competition irrelevant because it seeks to pursue the simultaneous achievement of differentiation and low cost, thereby opening up new and uncontested market space.As mentioned previously, the retail innovation trends focus mostly on technology. Blue Ocean Strategy?s value innovation places and equal emphasis on value and innovation because value without innovation tends to focus on value creation on a small scale and innovation without value tends to be technology-driven.
Third, Do It for Me. Demographic shifts and lifestyle changes are driving former DIY consumers into the do-it-for-me (DIFM) market. Retailers are responding to consumers? increasing demands with innovative services and conveniences. Installation services from home improvement and consumer electronics retailers and home meal replacement options are fast-growing examples of do-it-for-me innovations.
Compare your retail business with other industry competitors by drawing a strategy canvas. Companies can formulate and execute their Blue Ocean Strategy by building their strategic planning process around a strategy canvas. Retail Forward?s Do It for Me is a direct observation of how other companies have changed to consumer-centric products and services. Companies that develop a strategic profile on an industry by depicting factors and possible future factors are a great step toward innovation.
Fourth, Help Me Choose. Information overload, too many choices, more complex products and a lack of knowledgeable sales assistance create opportunities for retailers to develop innovative solutions for consumers. Allowing shoppers to sample the merchandise before buying, utilizing on-demand information kiosks, partnering with celebrities to provide a seal of approval and creating online communities provide consumers the help they need.
Fifthly, Come to Me. New distribution models are allowing retailers to connect with consumers wherever they are-at home, at work or in the car. Mobile retailing and target marketing are gaining in popularity as time-pressed consumers seek greater convenience. New-style direct-to-consumer rental concepts also are serving an important consumer niche.
Retail Forward addresses a great point ? consumers are connecting much more accessibly and in different ways. Blue Ocean Strategy too looks at the engagement of customers, but also addresses the non customers. To reach beyond existing demand one ways is focusing on existing customers. The other is the drive for finer segmentation to accommodate buyer differences. Typically, to grow their share of a market, companies strive to retain and expand existing customers. This often leads to customer preferences. The more intense the competition is, the greater, on average, is the resulting customization of offerings. As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets. To maximize the size of their blue oceans, companies needs to take a reverse course. Instead of concentrating on customers, they need to look to non customers. And instead of focusing on customer differences, they need to build on powerful commonalities in what buyers value. That allows companies to reach beyond existing demand to unlock a new mass of customers that did not exist before.
Six, Enhance the Experience. Retailers increasingly will differentiate themselves by using experiences to sell the dream-as well as the product-and bring the brand to life. By making stores ?super-immersive? and integrating branding into entertainment and other customer experiences, retailers are exploring ways to create memorable brand interactions that resonate with their target consumer.
Seventh, Make It Easy. Innovative process, service and design solutions that are simple, intuitive and in tune with shoppers? needs-along with new technology tools-can save consumers time and effort. Retailers that implement easier and more rewarding customer experiences will realize sales growth and enhance customer satisfaction and loyalty.
Eight, Do It My Way, shopping becomes more and more individualistic, innovative retailers will look for ways to present more unexpected gratification to shoppers and allow them to communicate themselves in unique ways. In addition to mass customization and personalization, retailers are offering opportunities for customers to contribute in the growth of new products and services.
Ninth, Help Me Connect. Social networking fosters community among customers who share a general interest. Retailers are forging stronger relationships with customers and earning their patronage by helping them to connect in ways that are significant to them and by responding to their expressive and substantial requirements.
Lastly, Speed It Up. Consumers want it fast; they want it now; and, they want it first. The need for speed in the shopping process will continue to drive changes in store concepts, design, location, merchandising, transaction processing and payment.
Retail Forward?s ?Retail Innovation Opportunities: Ten for 2010? focuses on how companies in the retail industry will innovate around new formats and distribution models, product and service offers, marketing and customer communications and other components of the retail business model. These creative ideas and core principles of Blue Ocean Strategy could lead to the next innovator in retail.
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Posted by Dan on Saturday, September 10, 2011 at 8:04 pm?
Filed under Innovation ? Tagged with Advancements In Technology, Aging Population, Allocation Of Resources, Blue Ocean, Centric Approach, Economic Value, Ethnic Consumers, Fertile Ground, Financial Performance, Healthy Lifestyle, Innovation, Innovation Opportunities, Innovation Opportunity, Maccan, Market Opportunities, Ocean Strategy, Opportunity Areas, Retail, Retail Innovations, Technological Innovations, Technological Trends, Traditional Competition
Source: http://www.theyellowads.com/self_improvement/innovation-in-retail
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