2023 is all about innovation in retail, and we love to see it. But before we can talk about the future of innovation, we first need to understand the current state of innovation; what it means, how the industry is prioritizing it, where the gaps are, etc.
In this installment of our State of the Industry series, we highlight some of the most significant findings from our recent "State of the Industry: Innovation in Retail"* data report. There may be a few things that surprise you.
There's a Major Gap Between Intent and Implementation
92% of respondents said innovation is critical to their future growth strategy, but only 22% encourage and reward experimentation and risk-taking*
Retailers know that innovation is essential to their success. Still, they often need help to implement their proposals effectively due to barriers within their organizations, such as outdated structures and cultures that often hinder progress. Additionally, many retailers don't prioritize or reward experimentation and risk-taking.
Due to their hesitancy, many find it challenging to keep up with shifting consumer wants and compete in a market that is developing quickly. But what are some of those hesitations?
• Concern over perceived financial risks associated with innovation
• A reluctance to change established processes and systems
• They may lack internal capabilities or resources to implement and manage new ideas
There is One Consistent Innovation Priority
79% of respondents say real-time inventory visibility is important*
Although retail is constantly evolving, one aspect has not changed. Retailers' top operational innovation objective continues to be real-time visibility. By focusing technology efforts on real-time visibility, retailers will be able to identify and anticipate operational irregularities, ultimately increasing supply chain automation and improving the retail experience's efficiency for customers.
Inventory visibility is a far richer concept than the word suggests, though. Making sellable goods accessible across channels is only one aspect of inventory visibility. It is about making better customer experiences possible by applying the insight generated from inventory data, such as preventing stock-outs, recommending substitute products, and tailoring promotions to specific customers.
Even Leaders Lack Key Technology Innovation Capabilities
Even though 17% of retailers are innovation "Leaders," 5 of 6 key innovation capabilities have a lower adoption.*
Regarding their capacity to experiment quickly, retailers are more developed than other necessary technology capabilities. While there are six key innovation capabilities, most retailers are deficient in five out of the six, including retail leaders.
• Be able to experiment quickly, test, learn, and fail fast
• Utilize the best technology wherever it exists in the enterprise
• Accommodate the complexity of their business' unique requirements
• Be able to pivot a strategy in another direction on a dime
• Execute inclusive strategies like connecting with partners and adding new pick-up locations
• Have the ability to configure physical experiences like digital
The growing interest in innovation is clear, so retailers must adapt by delivering customer experiences that are more personalized and give shoppers more control over their shopping. Customers want retailers to continue implementing innovative options, but they don't want technology simply to have it. They want technology that makes shopping more accessible, informative, and interesting.
As the industry and customer expectations continue to evolve, retailers must evolve with them. From real-time inventory visibility to unified physical and digital strategies, retailers are starting to understand the benefit and impact of implementing new technologies on their business. The better the technology, the more likely they will be able to experiment faster and stay ahead of the competition.
The technology that Toshiba is deploying in stores today can be built upon gradually to create a fully self-service, unattended store in the future. Each piece of technology provides solid value today and in the future. For a more in-depth look at how we can help the shopping experience in your store, check out https://www.younifyingexperiences.com/
* Incisiv, & Toshiba. (2023). State of the Industry: Innovation in Retail.