On the run up to this year's Retail Recharged, serial entrepeneur, Osvaldo Spadano, Founder and CEO of Elastera, shares his views on Innovation in Retail:
Do not miss the Retail Recharged event, taking place in London on October 5th 2016. In just a few years, Retail Recharged has established itself as the not-to-be-missed half-day, highly curated and invite-only Retail event, which attracts a fantastic crowd.
Retail Recharged puts retailers and learning at the centre of the event. Every year there are talks, panel discussions and debates on specific topics. Some of the best start-ups showcase their products.
This year’s key topics are:
They are certainly relevant to the current state of affairs across many retail verticals.
Unlike many other events, Retail Recharged is all about helping retailers surf the continuous waves of innovation.
Let’s set some context, this is what’s happening in THE US:
- Macy’s recently revealed plans to shut down 100 stores as it battles slowing sales and growing online competition
- Moody's analysts say Sears and Kmart don't have enough money — or access to money — to stay in business
- Teen-apparel retailer Aéropostale filed for bankruptcy in May
- JC Penney announced that it would close 40 locations, cut payroll and freeze overtime for its employees
- Sears has shuttered more than 200 locations over the past two years
- Similar stories for Sports Authority, American Eagle Outfitters, Office Depot, The Children’s Place, Walgreens (the pharmacy chain), and yes, Walmart!
I won’t be talking about Amazon’s share price. Here is what you really need to know: Amazon now has a warehouse within 20 miles of 44% of US population, up from 2% in 2006
While most retailers have failed to transform their traditional shops into showrooms, convenient small distribution centres, or pick-up points, Amazon keeps growing relentlessly.
So how can retailers keep their head above the water?
Whilst also struggling to run their traditional business or even keep their online store up (if they have one)?
On the one hand, they face a wave of digital and business-model innovation. On the other hand, they are constantly in fire-fighting mode, unable to even spare a thought about innovation.
I highly commend curated events such as Retail Recharged, genuinely looking to help retailers and make an impact. They bring some of the best success stories, shared with a wonderful audience.
What worries me though, is that one day, let's say, the VP of Digital is attending an inspiring event about retail innovation. Then, the next day they are in a weekly trading meeting discussing discount strategies, KPIs, the ROI of their digital marketing campaigns etc… Maybe it takes a day to get the reporting and material ready for the trading meeting. How frustrating!
There is a great disconnect between what’s happening in innovation-land and what retailers are facing today, a gap that has to be filled.
But how? Where can they start? I wish there was a magic formula… in reality, it is lots of hard work. In some cases, it requires a complete transformation.
Find a starting point and take some small steps.
Don’t go after costly and time-consuming 'fancy', 'disruptive', 'big' innovation projects (e.g. a new ERP system). Even Steve Jobs, later in life, discovered the power of incremental innovation.
Find a problem worth solving.
Arm yourself with a hypothesis on what could be causing or contributing to that problem, and run quick experiments to test your hypothesis. Don’t ask for a big budget or a dedicated team. Start with the resources available to you, involve people passionate to make a difference, real problem solvers.
Create momentum and show the business some early results, and most importantly, the learning that you have achieved by going through problem solving, experimentation activities. Then double down.
Retailers should learn from each other.
And leverage the knowledge and solutions provided by start-ups and other service providers. However, they need to start their own journey, which may lead to new business models.
Your business needs to focus on experimenting and learning faster than anyone else, that’s the only way to win. This is the reason why Elastera continuously evolves, to help retailers to be ready for the future, whatever it might bring.
To make sure you start on the right path, here are two important reminders:
- Start with the customer and work backwards – the 1st of Amazon’s leadership principles
- Listen to your customers and validate with experiments, do not be fooled by your own perception. 80% of brands believe they provide a superior proposition. 8% of their customers agree – “Closing the delivery gap” by Bain & Company
One of our clients, Graze, is the hallmark of an innovative company. Find out in this blog post, how Graze innovates and experiments their way to growth.
Osvaldo Spadano is Founder and CEO of Elastera, the high performing retailers' best kept secret (including Boohoo, Graze, Byredo, Time Out , Piazza Italia). Osvaldo is an E-commerce and Lean veteran with over two decades of internet industry experience, and Elastera is his 4th startup. Previously CTO at AlexandAlexa, YOOX and co-founder and CTO of Venda, the pioneer of SaaS commerce acquired by NetSuite.