Innovation: the bridge between ideas and value

Unless we change, we die is an age-old retail mantra. It reflects the need to keep pace with a changing market, customer tastes and preferences. Innovation is the process that takes all the ideas we have to respond to these changes and identifies those that are most likely to succeed if resources are put behind them. Creativity doesn't deliver returns; to innovate you need clarity about the customer and a methodology that tests ideas to learn where to allocate resources with the best chance of success.

Digital innovation is a process through which you can test out new ideas on real customers to drive growth. It uses your digital channel as a receiver rather than a transmitter where new ideas can be presented cheaply and often quickly to a current market and new products can be tested through buying interest.

Digital Innovation in Practice

Our experience of digital innovation in practice has taken three forms:

By focusing on the last of these three examples, we can pull out lessons for retail.

Innovating a retail proposition

Retail innovation is historically expensive and fraught with risk. It required investment in physical assets, staff training, merchandising and sometimes marketing investment just to create a test environment. On top of this was the resource intensive market research. There are plenty of examples out there of tests that are expensive failures and other examples of failed tests that continued to be rolled out ‘adjusted’ to try and make them work as the investment was too much to write off.

In the digital age, why would you test changes to your proposition in your brick and mortar stores? Given that customers are online there is far less risk, cost and time associated with testing innovation virtually. 

In informing strategy through digital innovation we have supported a leadership team to understand customer reaction to innovations that changed the fascia, developed the branding and identified solutions to handling price differentials between trade and retail. It took two months and provided robust data through split testing.

Test and learn using insight gathered from split testing, surveying, customer testing and page analytics can provide retailers with a quick, low cost and robust outcome against which they can make informed and confident decisions on proposed innovations.

Three take aways

James Hammersley is the co-author of ‘Leading Digital Strategy’, a guide to eCommerce strategy published by Kogan Page. He is a founding partner and director of Good Growth, a digital change consultancy that has worked with organisations such as The Economist, The Co-operative, O2 and Manchester United.