When planned, innovation is an essential part of the evolution of retail. But when retail innovation ideas are forced on an organization, they can be a toxic time burglar. In this post, I will review the first of two types of forced innovation: “Can it be done?”
Do Customers Really Want It?
Have you ever been in a meeting where someone says, “Why don’t we have self-checkout or mobile POS (point of sale)?” Sometimes, the pressures of Amazon and other more technologically advanced retailers force innovation. This is an example of keeping up with the Joneses. The other question I often hear is, “Can we track our customers in-store, or can’t we use data to tackle our return problem? Others are doing it; I am sure we can too.” This is an example of “can it be done” forced innovation.
One of the challenges with the “Can it be done?” question is that just about anything can be done. MIT has teleported grains of sand from one space to another. Rockets can be built and sent to the moon. Our cell phones have more computing power than the computer that ran Apollo 1. Virtually any retail demand could be accomplished with technology, provided you had unlimited money and resources. But no one has that.
So the more important question than, “Can it be done?” is, “Why do we want to do it?” Is it scalable? Will it enhance the customer experience? Will we earn more?”
A former retail colleague of mine shared with me his company’s desire to implement self-checkout in an upscale environment. There were several obstacles before we even got to the technology challenges. First, the store physically was not built to accommodate more equipment, such as automatic removers for security EAS tags. Second, because it was an upscale specialty store, all of the locations were different. The wrap stands and fixtures were custom-built, making changes problematic. Third, the store staff was limited to three to four high-performing sales professionals who already had multiple systems to deal with.
The introduction of a new technology would require a lot of training and support. Fourth, their IT department was outsourced, and their call center was too. They had several projects going on.
Now, let’s get into the technical obstacles. The first one had to do with network wiring and power: it just wasn’t available, even if they could find an out-of-the-box solution for self-checkout, which was unlikely. The physical restrictions of the store design, power, and cabling were limiting. The next technical challenge was how associates would remove a sensor tag, provide the customer a bag, or assist the customer in a short time if a problem or question arose.
I asked my former colleague, “So what did you do?” His answer was simple, “My CEO and my EVP told me to figure it out, so I did the best I could.” When I asked how it went, he described a plethora of obstacles and problems. And in the end, the company changed direction and decided self-checkout wasn’t a good idea for them.
Should it be a surprise that in an upscale environment that sells $5,000 handbags, the customers didn’t want to use self-checkout? This real-life example shows just some of the challenges of forced retail innovation ideas.
Slightly less obvious are these additional risks: an exposure to higher shrink, lower morale, and a strain on IT resources. If your IT, LP, and sales teams are focused on the innovation forced on them, what are they missing? Servicing the customer could take a back seat.
EDITOR’S NOTE: Check out the full column, “The Danger of Forced Innovation in Retail,” for an analysis of the second type of retail innovation ideas (“Keeping up with the Joneses”). The full article was originally published in 2017; this excerpt was updated August 29, 2018.