“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift” – Albert Einstein
I want Australian retail to innovate – believe me, just as in our medical and scientific communities, their success and differentiation as a clever solutions provider rests with being innovative.
Not the words reproduced on a company document or heard across the boardroom or senior executive table, rather actually putting into play a culture of ideas incubation, germinating into a ground breaking game changing insight.
We have many, many clever people in positions of influence in retail across our country. Why aren’t we really innovating?
Here are some of the reasons why:
We have historically been a commercial as well as geographical island – our less turbulent markets have not invited a need for innovation – increased and well documented competition for the consumer expenditure has amplified the need to be unique and different.
As retailers, we are driven by the immediate return for our endeavours, sales measured hourly to monthly, margins with the same veracity, all producing the holy grail of profit. The mantra of think medium term, however, do in the short term really does define much of our retailing today and by definition is not conducive to longer term thinking.
Our ideas come from our people and we execute accordingly. Absolutely important for many different reasons, but innovation is more likely to emerge from a myriad of external and seemingly non related sources.
Don’t we also create natural boundaries and constraints to innovation in the frameworks for assessment that we have used as managers over the years?
By way of example, thinking that asks for the business case: Who are we targeting? What is our ROI? Who is the project owner?
This thinking plays its part further down the ‘innovation to idea’ chain, however, they can be the death knell of innovation, as the opening idea evaluation criteria.
So what does an innovative retailer look like?
Budgeting somewhere between three to five per cent of all sales to an ‘innovation/incubation fund’ (shock, horror I hear?).
Creating an incubation lab for all innovation ideas – ‘define, refine, test’ – creation of a pilot store, site and so on to play in.
Creating a changing pool of great free thinkers from outside the organisation bringing ideas and ‘what if’ solutions to the business – allowing the great ideas to be developed outside the core business – ideas not initially within the business and then choked into operational submission.
This balanced with an internal culture that recognises and rewards clever and innovative thinking, contributing to the business innovation.
Let business as usual be exactly that: Business as usual driving margin return and customer satisfaction and simply don’t confuse the two – one delivers today and the other tomorrow.
So as the great innovators from Ikea, to Facebook and Apple, will always tell us: create the focus and environment for innovation, have great people around and funds dedicated. Value the idea as much as the implementation and we will be on the journey to truly be innovative.
Happy to hear your thoughts?
Happy Fit retailing
Brian Walker is founder and CEO of retail consulting company, Retail Doctor Group. He specialises in the development and implementation of retail and franchise strategies. Brian can be contacted on (02) 9460 2882 or firstname.lastname@example.org.
First published on Inside Retail on the 25th of March 2015