{"id":2541,"date":"2017-06-07T11:00:58","date_gmt":"2017-06-07T18:00:58","guid":{"rendered":""},"modified":"2023-05-31T16:45:24","modified_gmt":"2023-05-31T23:45:24","slug":"incubating-retail-innovation-in-the-digital-age","status":"publish","type":"post","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/blog\/retail\/2017\/06\/07\/incubating-retail-innovation-in-the-digital-age\/","title":{"rendered":"Incubating retail innovation in the digital age"},"content":{"rendered":"

The spirit of digital disruption in the retail industry is perhaps best illustrated by the spate of innovation labs and startup mentorship programs that have launched in recent years by retailers and consumer goods brands like Target, Best Buy, Walmart, Sephora, Kohl\u2019s, The Hershey Company, and even mall developer Westfield.<\/span><\/span><\/p>\n

Programs like Target\u2019s Techstars and Best Buy\u2019s Ignite align retailers with nascent startups while tapping into their collective brain trust for new ideas. <\/span><\/span><\/p>\n

Meanwhile, innovation labs like @WalmartLabs and The Hershey Lab are reimagining the retail experience\u2014brewing mobile and online innovations, omnichannel shopping solutions including virtual ones, grooming digitally-savvy retail talent, among other things.<\/span><\/span><\/p>\n

Retailers and brands are also taking advantage of similar offerings from the technology industry, like our <\/span><\/span>Microsoft Innovation Centers<\/span><\/a>, <\/span><\/span>Microsoft Ventures<\/span><\/a>, and the <\/span><\/span>NRF Startup Showcase<\/span><\/a> where a group of retail technology startups present to our customers while in New York for the event. <\/span><\/span><\/p>\n

Others are heavily investing in innovation through acquisitions, like Walmart\u2019s purchases of mobile shopping app Stylr and e-commerce start-up Jet.com.<\/span><\/span><\/p>\n

Both consumer goods and retail credit these innovation initiatives for launching new technology solutions and concept stores.<\/span><\/span><\/p>\n

The Kohl\u2019s mobile app, for example, was developed in the department store\u2019s Silicon Valley tech lab, and is now a centerpiece of its personalization strategy. Hershey\u2019s lab set about envisioning a reinvented shopping experience, and came up with a fictitious grocery chain and <\/span><\/span>a series of concept stores named Medley<\/span><\/a>.<\/span><\/span><\/p>\n

\u201cWhat we see in the future is there isn\u2019t really a one-size-fits-all category,\u201d says Brian Kavanagh, Senior Director, Retail Evolution at The Hershey Company. \u201cSo Medley is called Medley because we realized that there had to be a portfolio reaching different kinds of shoppers.”<\/span><\/span><\/p>\n

For many, the outcomes have been tangible. Walmart\u2019s strides to expand and improve its ecommerce platform have brought big gains, reporting a 63 percent growth in online sales last quarter.<\/span><\/span><\/p>\n

These examples showcase a consistent theme among retailers and brands: the ability to meet shoppers on their own terms, delivering just the right experience on any given day.<\/span><\/span><\/p>\n

Much of their technology efforts point to transforming and tweaking where most of the retail magic still happens: In store, where 91% of retail sales <\/span><\/span>are still generated<\/span><\/a>. <\/span><\/span><\/p>\n

Stores are rolling out location-aware mobile platforms that double as interactive, personal shopping assistants, catering to consumers\u2019 idiosyncratic wants and needs in contextually relevant ways. <\/span><\/span><\/p>\n

For traditional brick-and-mortar retailers, this includes blending their physical and digital assets in new ways to make the shopping experience more seamless, convenient and relevant. Walmart\u2019s mobile app offers in-store shoppers easier and faster ways to check in and out. And with its new shipping program, customers can now place orders online but pick up in-store, and receive discounts on certain items as a result.<\/span><\/span><\/p>\n

Online retailers, like <\/span><\/span>ASOS<\/span><\/a> and FreshDirect, are also focused on delivering a seamless experience, and emphasizing mobile-first strategies. FreshDirect, for example, is rolling out a more scalable long-term strategy <\/span><\/span>to deliver the same high quality in its mobile apps<\/span><\/a> as in its products and service, looking and behaving the way customers expect.<\/span><\/span><\/p>\n

\u201cOur customers are shopping on both web and mobile platforms, and they need to be able to seamlessly go back and forth,\u201d says Jon Malat, Vice President of Consumer Marketing Technology and App Development for Fresh Direct. \u201cOur job is to make sure that that shopping experience is the same regardless of the platform.\u201d<\/span><\/span><\/p>\n

There\u2019s good reason why all these brands and others, from J.C. Penney and Macy\u2019s to Target, which calls mobile the new \u201cfront door to the store,\u201d are making mobile platforms a critical component of their growth strategies.<\/span><\/span><\/p>\n

In the U.S., <\/span><\/span>74% of Internet usage now comes from smartphones<\/span><\/a>, and the path to purchase, including those made in store, increasingly begins on one. <\/span><\/span>comScore\u2019s<\/span><\/a> Local Search Study, for example, found nearly 80 percent of local searches on mobile devices turned into purchases, with nearly 90 percent of those purchases being in a physical store (73 percent) or on the phone (16 percent); and roughly three-fourths (76 percent) of them happening the same day and most within a few hours.<\/span><\/span><\/p>\n

The extent to which mobile phones have become consumers\u2019 command centers cannot be underestimated. Consumers increasingly use their smartphones as a minute-to-minute, never-leave-home-without-it lifestyle tool to get them through the day.<\/span><\/span><\/p>\n

They\u2019ve become everything from a portable concierge, travel agent and phone book to library, tour guide and shopping mall, catering to shoppers on demand at their precise moment of need.<\/span><\/span><\/p>\n

The Harvard Business Review calls these \u201cmicro moments,\u201d whereby consumers turn to their mobile devices with four imperatives: \u201cI want to know: specific information on an infinite variety of topics and products; I want to go: where to head, and when for an activity or to find a particular product; I want to buy: purchases, opinions, facts, deals and comparative information on products and services, even when standing in a store; and I want to do: how-to-information on any variety of tasks and activities, from a home repair to a new yoga pose.\u201d And retailers have taken note.<\/span><\/span><\/p>\n

To read more articles in my digital disruption series, you can find them <\/span><\/span>here<\/span><\/a> on the Microsoft Retail Enterprise Blog and below.<\/span><\/span><\/p>\n

<\/a>LinkedIn: <\/span>Tracy Issel<\/span><\/a><\/p>\n

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Additional Reading:<\/span><\/span><\/strong><\/p>\n