The concept of the innovation lab and the sudden resurgence in innovative and disruptive ideas in retail is a welcome trend which behemoths like Nordstrom, M&S, Walmart and Tesco have embraced successfully.

Econsultancy has today published a 60+ page best practice guide which acts as a ‘how to’ for brands who want to create their own in-house lab, emulating the successes of others employing lean/startup methodologies and rapid R&D techniques to innovate within their businesses.

The report, 'Innovation Through Rapid R&D: Best practice guide to running your own in-house lab' is written exclusively for Econsultancy by Joylab’s CX Director Fergus Roche, who works with brands on omnichannel development.

 

The recent recession and shrinking consumer spend has inhibited innovation of late, but the growth in ubiquitous mobile tech and consumer expectation has meant brands have had to respond to consumer demand regardless the condition of the economy. 

Marketing budgets are always the first to be culled during hard times and budget spend on digital has seen consistent growth (check out the Econsultancy 2014 Marketing Budgets Report). 

This can perhaps be attributed to the obvious gains from investing in an area which has such a vast reach and tangible measurability and metrics in terms of levels of engagement.

This is not because it’s an easy channel to innovate in. Perhaps the opposite, stand alone digital has become formulaic – cross channel, seamless experiences are now the standard.

There’s so much more engagement and value for the consumer when you bridge the digital/physical divide. Don’t build another campaign or site no-one wants or needs – build digital products and services that drive engagement and provide a real benefit to the consumer.

Now we’re well beyond the original digital agency boom,  and as more and more become full service (and commoditised), the recent Econsultancy Soda Report would suggest (and I would support this) that brands are looking to expert practitioners/niche sector specialists to support internal teams. Plugging in boutique and agile teams into their own resource. 

The upshot of this can be that working with these specialist teams identifies bottlenecks in the brands and organisations themselves – that even with these expert practitioners to facilitate projects they’re stymied.

Projects falter and are ultimately doomed to fail due to internal bureaucracy, heavy process and legacy ways of working. This in turn (if the board are watching) highlights the need for ‘digital transformation’ which is highly apparent and prevalent industry wide at the moment. Not only in retail, it’s finance, its third sector it’s everywhere.

How does this seismic shift in the way previously silo-ed and sometimes staid organisations happen?

Change makers or agitators (as a Multichannel Director of a large supermarket chain framed it to me), are brought in – either third party consultants or internally appointed Multi/Omnichannel Directors. We’ve seen varying levels of success across the sector with the likes Argos, B&Q, John Lewis certainly appearing to be making great progress.

Taking this one step further the guys I introduced at the beginning; Nordstrom, Tesco, Walmart and the like – have sidestepped internal issues and red tape by allowing a standalone lab environment to act and ideate like a start up.

Setting up these environs allows rapid prototyping, agile practices and the development of genuine insight – fast.

I’m sure many have seen there’s some excellent YouTube content on Nordstrom’s explorations (lab was setup in 2011, ahead of the curve and the economic recovery) – the team uses live user testing, lean startup methodologies and one week tests to achieve results, whatever they may be, as quick as they can be.

If you haven’t seen it, here it is:

  

This is what retail and commerce needs. More innovation, more embracing of fail fast culture, more new thinking, and quick.

For the benefit of the brands, consumers and the industry as a whole. It’s not like consumers are going to become less demanding. Those brands that don’t adapt and adopt rapid/agile practises simply can’t eek out a margin against the competition who have. I’m sure of that.

As sure as optimisation increases conversion, testing your hypotheses is a no brainer and learning fast, even if they’re sometimes painful lessons is invaluable.

If you’re keen to hear more about how to mirror the success of Nordstrom, Tesco, M&S and others by setting up your own lab, get your hands on a copy of the Econsultancy/Joylab collaboration.

Kieran McBride

Published 2 October, 2014 by Kieran McBride

Kieran McBride is Co-Founder atJOYLAB Ltd and a contributor to Econsultancy.

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