Fear of failure is the enemy of change. And the majority of decision makers are unwilling to make a major bet on an unknown innovation with no proven ROI. To counter this we have seen some organizations such as Walmart and Target create “labs” where innovative ideas are explored and perhaps implemented, e.g., Walmart Labs. But this is very different than an internal change agent that champions an unknown future state. I don’t believe large retailers can structure their decision making to foster change. Instead they must accept that change is inevitable and disrupt themselves into a new category.

Innovation only happens when somebody is expected to do it, otherwise the force of deadly slow (or rapid) death by inertia will prevail. Everybody in the enterprise must expect it from everyone above and below as a culture of innovation. When this is slow to emerge, innovation centers should be established to be a force for improvement by identifying and advancing business, marketing, operating and technical opportunities that others may overlook or that span across organizational boundaries.

Dynamic in-store signage is an example of an approach that improves the productivity of place, processes and people and positively impacts many areas such as customer engagement, location appeal, branding, merchandising, supplier support, associate training, safety improvement, hiring, loss prevention and others. Introducing this approach requires executive or innovation group stewardship.

Change management challenges most retailers. Those that have focused on developing this capability are the most successful in the industry and have growing brand equity. Executive sponsorship of change agents is key to this capability.

The first step to saying yes to innovation is to be innovation-ready. No, that does not mean a retailer must get rid of all the legacy software clogging up the computers, but it does mean creating an infrastructure based on a core. A core is established by looking at mission-critical processes — processes focused around customers, suppliers and employees. Once this is in place and with the right culture, retailers are better prepared to say yes to innovation and to even know what innovation best suits their brand.

I also agree with other posts here that retail needs to bring in some fresh blood in order to accomplish this. It is too easy for the long-term staff to become inundated with the chicken wire and duct tape that is holding it all together today.

But that’s just my 2 cents.

Relevance and ease of implementation are crucial. Even if the proposed solution meets the business needs of the retailer, a complex integration can stymie a proof of concept before it gets off the ground. As the author suggests, solutions which can be deployed in a “light-touch” manner (ideally requiring very little involvement from IT) will be more likely to advance to pilot, especially if they are backed up by proven reference customers. Such “light-touch” deployments are likely to involve much less risk from a technical perspective and will give the business a decent idea of what their ROI will look like should they decide to deploy the solution across their estate. Retailers who are prepared to have a sandbox or pilot environments for relevant new solutions which are easier to deploy will reap the benefits.

Two thoughts here in addition to what has already been said:

First, decision making around innovation or the adoption of new technologies needs to be grounded in a fundamental understanding of your current and/or target customers. Knowing not only how they shop but what their broader needs are should be a primary filter on where a retailer decides to focus their resources available for innovation.

Second, it’s a lot easier to come up with innovative ideas than it is to put them into practice. Integrating innovative experiences, services or products into an existing business requires a lot of attention to less sexy aspects like governance and project management. I find that a lot of companies struggle with the discipline and attention span required to implement their ideas well. Sam Stern at Forrester has done some great work illustrating the importance of these more difficult and “less fun” aspects of CX and innovation.

If I may offer a contrarian view (at least insofar as the questions are concerned, not so much Sterling’s essay): I think there’s a difference between being an “early adopter” (of technology), which I believe most businesses try to be, and being on “the leading edge,” which is a much riskier proposition. IMHO, many of the latter try to be first simply for the sake of being first. Isn’t embracing tech for its own sake often just as bad as avoiding it?

As the saying goes, “Necessity is the mother of invention.” Retailers need to address many perennial challenges, like in-stock conditions, COGS, etc., while managing emerging issues including e-commerce shipping charges, differentiation, etc. All of these lead to opportunities for innovation. There are some great examples around the world of retailers taking advantage of the newest tools while minimizing the risk of being first-movers. The leadership of these organizations needs to initiate the need and potential for innovation to gain enthusiasm throughout the enterprise.

It’s normally external forces that convince retailers to innovate. Reactive as opposed to proactive. Using a construction analogy, it’s easier to build a new structure than an extension. Therein lies the added challenge for traditional, established retailers. They’re building extensions all the time. With limited funding and a marketplace that’s getting more and more competitive. Plus their key resources are too busy trying to integrate the basics as well as getting caught up in (often traumatic and expensive) transitions. Charles Dimov nicely summarises where to focus.

For me, retailers need to be easier to approach, open to ideas from outside their organisation and agile to test.