Innovation Obsession

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Innovation Obsession

By Mike Troy - 06/14/2017

How retailers and suppliers think about innovation today has changed dramatically because their survival is at stake.

The retail industry has dealt with countless innovations over time and many of the things taken for granted today were seen as major advancements in the day. The advent of electric lighting that allowed stores to stay open in the evening was a pretty big deal. So was refrigeration. The open display of merchandise and the use of price tags were big changes for operators. The introduction of bar codes, scanning and credit cards forever changed retail and the shopper experience.

When I became involved in the retail industry in the early 1990s, innovation centered on store formats with focused on specific merchandise categories. There was also a lot of activity around store design, store size and merchandise planning and presentation. For Walmart to open a 150,000-sq.-ft. supercenter rather than a 200,000-sq.-ft. location, or supermarket operators adding gas stations to their parking lots — these were all regarded as innovations.

Such changes were significant at the time. Now, as consumers, we are living through, adapting to and constantly being offered new ways of engaging with retailers and brands to satisfying our daily needs and wants. Some of our expectations today are things we didn't know we needed and now can't live without, such as a smartphone with high definition video capabilities capable of live streaming on social media platforms or the ability to speak to a digital assistant and have ordered products delivered within an hour.

For these reasons and countless others the retail and consumer goods industry is obsessed with innovation. You have probably read or heard at least 1,000 times, how the pace of change is accelerating and the industry is being disrupted and transformed in unprecedented ways. No argument there, but prior generations of retailers and suppliers would have said the same thing in their day because change has a tendency to feel unprecedented to those experiencing it. Putting aside stuff like electricity, refrigeration and bar codes, it was a pretty big deal in the 80s when warehouse clubs emerged or when Walmart started rolling out supercenters. There was a lot less hype at the time and the changes were easier to see from further away. The best example of this phenomenon today is the imminent arrival of Lidl along the East coast, a market entry the company has made no effort to conceal, or perhaps Amazon's foray into physical stores.

An obsession with innovation is a good thing because retail is going to be very different in 5, 10 or 20 years. How exactly, I'm not sure and neither are some of those working on innovations, but one thing is for sure. Some of the concepts that sounded outlandish the first time you heard them — drone delivery, autonomous vehicles, cashier-less checkouts — are well along the path to reality and may seem ordinary in the future.

A fertile imagination and a willingness to fail have always been important in retail, but now those traits are essential as retailers and brands will eventually serve consumers in new and strange ways that sound impossible today. This point was driven home recently while attending the IRI Growth Summit and hearing from Mick Ebeling, founder and CEO of Not Impossible Labs, a company that describes its mission as creating technology for the sake of humanity.

His presentation was one of the most thought-provoking I've had the opportunity to hear during the past 25 years and the key takeaway was that everything that is possible today was once impossible. The same will be true in the retail industry, which is why those most obsessed with innovation today will be the retail leaders of tomorrow.

Mike Troy

Editor-In-Chief
[email protected]