Raising the Bar on Innovation

Last weekend, I had the great opportunity to attend and speak at the DDi (Display and Design ideas) forum in Sonoma, and it was a great eye opener. This week, I’m at the Shop.org Annual Summit and am very excited to see all of the innovation here (not least of which is the unveiling of ClickSee 2, RichRecs+mobile and InstantShopper of {rr} Labs!!!). I’ll keep you posted as this week unfolds as well.

So, back to DDi. First off, the opportunity to meet with the heads of design of major multi-channel retailers was really a treat as they are not my typical audience or peer-group.

More relevantly, the content and form of the discussion they had was fundamentally different than the discussions I have with my fellow gear-heads. The concept of innovation—in the form of a new format store, or the use of a new type of digital display, creating a raw oyster bar, or testing the assortment by region—was not only distinct in the form of the innovation, but also in the constraints. It takes more time, money and on-premises hands-on doing to innovate in a store environment. They had to really, really think about not only what they innovate, but how. As a result of this, my conversations with the store designers weren’t just an interaction concerning me as the subject-matter expert on digital innovation. In fact, it was just as much about me learning from them how they’ve designed their organizations, processes and finances to support innovation.

In other words, as a function of the increased complexity of these environments, these folks had better learnings about how to foster retail innovation than most “innovative” retail technology companies I’ve met!

  • McDonald’s “Foster innovation within a framework:” To facilitate freedom as far down within the organization as possible, McDonald’s creates very strong and consistent frameworks (constraints) which define the McDonald’s brand and experience. Further they create processes to support divergence away from the norm. In this way, individual store or region managers can cater their in-store experience to their client-base.
  • “Self-funded innovation:” Some of the larger retailers classify projects as self-funded or not. The self-funded ones are a “slam dunk” because they replace assets/infrastructure whose costs exceed those of the new solution (doesn’t speak to value, but…). This approach tends to cater better to businesses that have a significant degree of inefficiency of cost. However, it would be foolish to ignore the existence of this opportunity. It is indeed worthwhile to consider creating processes and a “cabal” which supports accelerating ideas of this form.
  • Fail-Fast/Cut the Cord: Here was the most impressive example of discipline. All of the execs with whom I spoke directly highlighted their willingness to create structures (both in generating pilots and in single-store concept testing) where failure was embraced as a byproduct of progress—and in fact as a fuel for revolutionary thought and insight. Further, they expressed the rigor and will to try something (almost anything), learn from it, and kill it within 2 weeks or a month. Just think: What about a barbecue and rib bar in an organic food store…? …in San Francisco? Tried. Failed. Learned. Succeeded in Detroit.

When I think of the offline world, I generally think of a huge up-front cost and an overwhelming reluctance to fail. I think of the engineering/development and IT worlds as agile and willing to fail-fast. While both statements may hold elements of truth, the passion and discipline of these offline retail experts was invigorating. The net-net of this past weekend is a feeling that I need to raise my bar on building and executing against an infrastructure of innovation.

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This post was written by David Selinger

ABOUT David Selinger
David is CEO and founder of RichRelevance. He first garnered international recognition as an expert in the field of eCommerce data analytics and personalization with his groundbreaking work leading the research and development arm of Amazon’s Data Mining and Personalization team. In that role, David increased Amazon’s annual profit by over $50 million (25% of US profit, 2003) setting the industry standard for recommendation services. To view David's full profile, click here.
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