Innovation Arkiver - IAM Branding, Innovation, Performance expertise to leaders and boards.

The Next Generation of Retail – Five innovative companies to follow in the coming years

8. April 2019/in Innovation/by Nicolai Grevstad

THE NEXT GENERATION OF RETAIL – FIVE INNOVATIVE COMPANIES TO FOLLOW IN THE COMING YEARS

In the recent years we have witnessed a big transformation within retail. Physical stores are struggling to maintain their sales and margins are slim. In this article, I want to explore the evolvement of global retail by focusing on five innovative companies that have all embraced new technology and leveraged its capabilities to reach a rapid changing consumer. I have chosen 5 companies to pay attention to in the coming years:

1. Walmart – the world’s largest retailer has become an e-commerce powerhouse

2. Glossier – using social media to establish a beauty community platform

3. Alibaba – The largest ecommerce company and retailer with marketplaces Alibaba, Taobao, Tmall and its well known payment app, Alipay

4. Intersport – largest sporting goods retailer in the world

5. Casper – the mattress retailer is designed to complement the digital experience

Each of these companies have given the retail world something to grasp, their ability to scale and speed of innovation make these companies very exciting to follow in the coming years.

Walmart – is the worlds largest retailer that is piloting new concepts to reach a changing customer behaviour.

Walmart is a company driven by data and innovation by providing the customer what they want, where they want it and whenever they want it. In 2018, a new partnership with Spark Delivery was established as Walmart expands its Grocery Delivery Service. This is a pilot project that focuses on the “last mile” delivery. This is how it works: think of Uber without passengers, but is instead used to pick up groceries for deliveries. Drivers sign up when their schedule is available and when an order ticks in, they are on their way to pick up groceries. Walmart is brilliant in testing new concepts before they roll out big scale solutions. This allows them to test out how the market responds while keeping the cost at a minimum. If the concept is proven to be successful, they scale up. Another initiative Walmart is focusing on is AI technology to explore both store associate-facing and customer-facing applications. They have created an intelligence Retail Lab for developing AI technology and applications inside physical Walmart store. Walmart has big plans to grow its e-commerce business, but they remain aggressive in their physical expansion of in-store experiences. How can technology improve the customer journey when they enter a Walmart store? An example is to simply add technology to detect numbers of shopping carts available at the entrance. If there are no carts available, the customer will begin their shopping experience with a negative feeling. Walmart wants to improve every aspect of the customer journey and make sure the customer is left with a positive feeling regardless of how or where they choose to shop.

Glossier – a beauty disruptor established from social media.

Glossier was founded in 2014 by Emily Weiss and has since then developed its own beauty community platform that has quickly evolved to become a direct to consumer sales platform. Glossier has gained traction in the ecommerce space leveraging the power of social media. By testing products and receiving constantly feedback from customers on what they think and like, Glossier is able to use this feedback to adopt the market and publish a better product. This is done by using their dedicated Instagram account to test and see how the market responds before releasing the product for sale. This business model has proven to be extremely successful. Content creation and communication with the end customer at all time are important to maintain and grow new customers. The communication and involvement of the end customer also works as a source of advertisement, which only attracts more customers. Glossier has positioned themselves as advisors to consumers, not just focusing on the products itself. They are truly customer centric and takes the feedback of the customer and turns it into something the market will value.

Alibaba – the Chinese e-commerce giant that continues to expand its “new retail” concept.

Alibaba is well known in Asia, but has not received similar attention in the west compared to for example Amazon. Alibaba is the biggest ecommerce company in China. It operates B2B, B2C and C2C sales services via web portals. They do not try to target everyone in one platform, but are instead looking from a holistic view to target different platforms to different target groups. This way, they manage to stay relevant and can tailor more to these segments.

Alibaba has grown to be one of the most influential companies in the world, and that is mostly because of their online presence. The past few years we have also seen their entrance into the physical retail world. Their concept Hema is a supermarket driven by synchronisation of online and offline channels. Their massive data collection through digital footprints of using smartphones is critical in developing suitable and targeted offerings to the customer. Another way Alibaba is gaining traction is their ability to pilot and innovate faster than anyone else. They are masters at testing concepts and see how the market responds to it. Their effectiveness allow them to quickly make adjustments and focus on what truly gives the customer value.

Alibaba’s success also relies on their ability in partnering and acquiring companies. This gives them an edge as they expand rapidly into new territories. For example, Alibaba saw a great opportunity in developing their “new retail” initiative by acquiring Ele.me in 2018, Chinas leading delivery platform. “Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail Initiative,” Alibaba Chief Executive Daniel Zhang said in a statement. In addition to Ele.me, many other strategic partnerships have been important in their uprising. A key in their successful development was their acquisition of Cainiao logistics, with a goal of expanding their global delivery capabilities. Alibaba has even taken the next step in establishing their own warehouse in Belgium to optimize the efficiency for deliveries in the European market with their bold ambitions of 72 hours delivery regardless of location. Alibaba’s latest strategic partnership is with Starbucks, a plan to transform the country’s coffee industry.

Intersport – the Swiss based omni-channel retailer has grown to be the largest sports goods retailer in the world.

Intersport Is leading the future of sporting goods industry. Carsten Schmitz, CDO in Intersport is saying the following: “We distinctly notice how much our retailers are interested in digitization. We take an integrated perspective of all processes and develop tools that enable our retailers to smartly use aggregate data to prompt business success and be present in all channels in the best way possible.” Intersport has pilot-tested many digital tools in physical store to see what truly adds value to the customers. Based on the feedback and response, they have rolled out tools such as 3D foot analysis. A multi-sensory VR dressing room has also been tested. In-store innovative experiences are key in the future of sport retailers. This is a natural step as ecommerce is attracting more customers and represents most of the future retail growth. In the video below, you can see how Intersport is embracing the new retail concept:

Casper – a leading mattress retailer that blends experiences in-store.

Casper is a leading mattress retailer that has integrated concepts and engaging experiences into their physical stores. The interesting fact is that they started as a pure online business, and after trying out pop-up stores for a while, they are now already expanding their permanent brick-and-mortar stores. This proves that a combination of online and offline presence is important if you make the right moves and stay ahead of the consumer. In Casper’s physical store in New York, you can pay 25 dollars to take a nap for 45 minutes, which helps you to make a more informed buying decision. Casper plans to open over 200 of its own stores within the next three years and shows no fear in expanding physical.

Each of these five companies are representing elements of the next generation of retail, which we will see on an even bigger scale the next few years. There are many reasons why these companies are successful, but here are three important take aways in which we all can learn from:

Make strategic partnerships to enhance your offerings – how can our products or services be complemented to give the end consumer an improved customer experience?
Piloting and testing is crucial in understanding the respons from the consumers. What works, what can be improved? Is it worth expanding?
A merge between online and offline is key in the future of retail. Much of the future growth will come from online purchase, but the customer also expect physical presence to complement their online purchase. These days we often hear about how ecommerce is the only solution to growth, but we have seen that many of the successful online retailers are now expanding to physical stores. The physical presence will complement the online presence and its critical to connect these experiences in order to be truly customer-centric.

We are living in a world that is driven by advanced technology, but in the end of the day we are all humans that appreciate the “human touch”. The ones that are able to connect technology with the “human touch” are the ones that will thrive in the coming years.

Sources:

https://www.bcg.com/publications/2018/to-see-where-retail-stores-are-heading-look-china.aspx
The bright future of retail: https://www.fastcompany.com/90281205/the-surprisingly-bright-future-ofretail
Walmart – last mile delivery: https://news.walmart.com/2018/09/05/walmart-tests-new-last-milegrocery-delivery-service
Walmart to open an in store AI lab: https://www.retaildive.com/news/walmart-to-open-an-in-store-ailab/541936/
Alibaba acquires Ele.me – https://www.forbes.com/sites/ywang/2018/04/03/chinese-e-commerce-giantalibaba-acquires-ele-me-in-9-5b-deal/#6022366a357c>

Glossier:

https://digit.hbs.org/submission/glossier-a-direct-to-consumer-beauty-disruptor/
Interpsort: https://ixtenso.com/retail-marketing/digital-sporting-goods-retailers-decathlon-intersportpush-ahead.html https://www.youtube.com/watch?v=68cA4M4RSeY

INNOVATION METHOD TO HELP YOU SUCCEED

16. August 2017/75 Comments/in Innovation/by Inger A. Myklebust

In this blog the proven FORTH innovation method, is explained by our great partner and the founder himself, Gijs van Wulfen.

Starting innovation is for many a struggle to master. A study by Booz & Company shows only a quarter of all companies are effective at the start of innovation. And Stage-Gate Guru Robert Cooper shows that of every seven new product/service projects, about four enter development, 1.5 are launched, and only one succeeds.

You might recognize some of the struggles in practice:

“Our short-term mindset rules.”
“Our innovation process is unorganized. It’s chaos.”
“We cannot change our habits within the company.”
“We struggle to get inside the head of our customers.”
“There is no support for innovation among my colleagues.”

So HOW do you start innovation effectively with FORTH innovation method?

We like to help you with a structured approach, which combines both creativity and business reality. The innovation method is called FORTH – an acronym found in the first letter of each of the 5 steps: Full Steam Ahead, Observe & Learn, Raise Ideas, Test Ideas and Homecoming.

The FORTH innovation methodology structures the chaotic start of innovation and fosters a culture for innovation in an expedition of 20 weeks.

The deliverables of this innovation expedition are 3-5 mini new business cases for innovative concepts, which fit the ‘in the box’ reality of your organization – otherwise nothing will happen.

FORTH innovation methodology was developed in practice and has been used successfully in Europe by more than 60 organizations in both B2B and B2C markets and in non-profit sectors. The method is the base of the innovation bestseller book: The Innovation Expedition.

Recent scientific research, studying 10 FORTH cases, shows that the use of the FORTH methodology doubles your innovation effectiveness.

A FORTH Expedition of 20 weeks with a multi-disciplinary team has 5 stages.

FORTH innovation method Stage 1: Full steam ahead

Preparation and a good innovation method increases the chance of success. First you determine the purpose and direction for the ideation phase in an innovation assignment. And you determine the criteria the innovative concepts must comply to. The second important decision is to determine what your ideal ideation team looks like. The bigger the team, the greater the diversity and the greater the chance of wild, crazy, pattern breakthrough ideas. A special mission asks for special people.

That’s why top managers are also part of the innovation team. When they are part of it, they will support the end results.

At the FORTH kick-off workshop an enthusiastic multidisciplinary team is ready to go.

To dig deeper check 4 free checklists to download on Full Steam Ahead.

FORTH innovation method Stage 2: Observe and learn

There are no old roads to new solutions. That’s why it is essential to get fresh insights. That is the essence of stage two. Who is the potential customer and what motivates and frustrates him or her? Identifying customer frictions is key. In this phase you get to know the customer and his or her behaviour. Besides customers, other sectors and thought leaders serve as a source of inspiration for the innovation opportunities, identified in the kick-off.

Ask yourself the question “If we want to innovate in this direction, from whom can we learn?” This way you look for best practices and valuable experiences of other persons or organizations involved with these opportunities.

Team members share their insights and lessons learned in several ‘Observe and learn’ workshops in this phase. The exploration take place in six weeks. At the end, the ideation team gained relevant new customer insights and has explored interesting innovation opportunities. To dig deeper check 4 free checklists to download on Observe and Learn.

FORTH innovation method Stage 3: Raise Ideas

This step is the creative pièce de résistance of FORTH. It consists of an intensive two-day ideation workshop. Ideation is inspired by the discovery stage and team members normally cannot wait to share their ideas. This leads often to 750 ideas or even more. They are converged into 40 idea directions and twelve concrete concept statements. In a second session the concepts are taken a step further and are improved.

External experts are invited to strengthen the team. Use cartoonists to visualize ideas and to take care of the first designs. Dig deeper and check 4 free checklists to download on Raise Ideas.

FORTH innovation method Stage 4: Test Ideas

How attractive are the new product or service concepts really? That’s a legitimate question. Therefore you reflect on the concepts immediately. The strength of the new concepts is checked among potential customers. This research, on a small scale, can be done quickly and simultaneously in several countries or continents, with ‘live’ customers or online. First reactions from potential customers often offer excellent handles for improvement. Another workshop takes place in which the team brainstorms how weak spots can be fixed.

Having concepts tested in this early phase creates the advantage that you can use the ‘Voice of the Customer’ to gain internal acceptance for the concepts later on in the stage-gate process. At the end of this phase it is decided which 3-5 concepts are worked out as mini new business case in the last phase. Again, you can check 4 free checklists to download on Test Ideas.

FORTH innovation method Stage 5: Homecoming

In The final stage of FORTH you bring home the deliverables of the innovation expedition. It is not a bunch of yellow post-its or mood boards. Instead the innovative concepts are worked out as mini new business cases. These are business plans per concept elaborating on essential business elements such as the attractiveness of the new concepts to the target group, the sales and profit potential, how the concept fits in the business strategy and whether realising it is considered feasible.

Presenting end results in this form creates a lot of appreciation in the boardroom. A business case is something top management will recognize and understand. The activities in this last stage cover around four weeks. At the end of this fifth – and final – stage the ideation team has completed its tasks. In practice it takes you around fifteen weeks after the kick-off to return with 3-5 mini new business cases. Dig deeper and check 4 free checklists to download on Homecoming.

FORTH users are very satisfied with the method

The strengths of the method are described by them as:

Systematic.
Fosters internal cooperation.
Closely connects the end-customer.
Generates tangible business cases.
Increases your innovation effectiveness.
Fosters a culture for innovation.

Gijs van Wulfen published the Amazon innovation bestseller: “The Innovation Expedition”.

5 star review: “Here’s just about everything you need to know about how to establish and then sustain an innovation culture” (Bob Morris; Amazon reviewer).

CONTACT US

Please leave your contact details and we will contact you shortly.

CUSTOMER EXPERIENCE LEADERSHIP

26. February 2017/in Branding, Innovation, Performance/by Inger A. Myklebust

Customer experiences – do you know what it takes to be in the lead? Marginal growth and incremental improvements are no longer enough to maintain a lead in the market. We have to think differently, lead differently, and serve customers in new ways.

THINK DIFFERENTLY!

Clayton M. Christensen, professor at Harvard Business School and one of the world’s leading experts in innovation and growth, asks the following question:

What is the job your customer want from you when buying a product / service from your brand?

We all have many jobs that need to be completed in our lives. Some small (how kill time in traffic), some are large (find a more satisfying career), some are unpredictable (finding a suitcase lost by the airline) and some are regular (finding a healthy lunch in a rush). Christensen explains that when we buy a product or service we use it to help us complete a job. If it does the job well, we will employ the same product / service the next time we need to get that job done. If it does the job poorly, we quickly find alternatives.

Therefore we have to start by thinking about which job the customer has hired us for and paying us for. And why they are not doing it themselves.

Customer experience is the customers perceptions – both conscious and subconscious – as a result of interactions with our brand through digital and physical platforms. We are no better than the weakest link in the customer’s micro- and macro- experience with our brand / company.

75 percent of millennials check business values and behavior before they purchase. Expectations change with developments in opportunities through technology and disruptions. That is why we have to think differently and have the ability to quickly pivot our business model.

Businesses that are transparent and show that they stand for good, progressive values that embrace something bigger, stand out the most. Brand perceptions comes in a larger degree from clients buzz and people who work in and with the business. Dialogues with each other and voices in social media should not be underestimated.

What do people say about your business / brand when you are not present?

Think appropriately in terms of the job the customer wants and facilitation of continuous development of the unique customer experience.

LEAD DIFFERENTLY!

Gartner summarises leading the customer experience very well: “The practice of designing and responding to customer interactions to meet or exceed customer expectations, thereby increasing customer satisfaction, loyalty, and advocacy.”

Do you nod approvingly when thinking of your good marks in customer satisfaction and quality in customer deliveries? Slow down! You are actually at risk of being passed by other more innovative solutions if you do not check your blindspots. Many sporty Teslas are on the road today, and can easily pass your Rolls Royce if you do not keep up. Exclusively focusing on today’s customer experiences is not enough.

Smart management ensures progression through continuous renewal and changing business models.

Loosen the controlling management and give room for a more holistic, open, curious, experimental and customer focused culture.
Discuss and test hypothesis with customers, employees, and partners.
Analyse and learn. Dare to be different!

SERVE THE CUSTOMER IN A NEW WAY.

Design of good, unique customer experience involves specialized, empathy, creative and even artistic abilities. The organization mentally moves forward in the value chain and in time.

We work both systematically and methodically towards continuous improvements, and we ALWAYS strive to lay in front of customers expectations. We do the best job for our customers and ensure that their experience is unique with us.

Real time insight ensure that we always know the following:

The job our customers want from our business or brand
The good experiences they have from other brands / businesses / apps that change their expectations towards our brand.
How we improve our customer experience further tomorrow.

THINK, LEAD AND SERVE.