NRF 2018: Partner with start-ups for innovation

Retailers both big and small need to become more open to partnering with start-ups to create a culture of innovation within their businesses.

“Every company needs a bit of a ‘lab approach’ – you need to constantly be testing, learning and experimenting,” said Beth Comstock, former vice chair of GE during Monday’s opening keynote at NRF 2018.

“Most companies, whether you’re a Walmart or you have one store, started with an entrepreneurial seed – why have we given that up to Silicon Valley?”

Comstock admitted harnessing this entrepreneurial spirit can be difficult, so she suggests partnering with start-ups to create new ideas and products.

“Retailers have a platform which a start-up would only dream of having, but there’s a power in discovering these new trends and partnering with these emerging thinkers,” she said.

“You need to be tethered to the mothership but have the freedom to innovate.”

Freedom to fail

But retailers need to be open to failure. “No one likes it – I don’t like to fail,” she said “But testing things earlier so you get to the first stage of feedback, and only funding until you get enough evidence to go to the next stage.”

She added: “[Otherwise] we throw all of our money at it and then five years later it’s a bomb.”

Comstock suggested retailers should outsource or partner to develop an idea, but there are times when you need an internal ‘lab’, like she had at GE. “When you realise the idea is worth pursuing, you need to give it to a team to work on.”

Testing with real customers

Comstock said retailers need to get these new products in front of real customers as soon as possible, but she warned companies need to be very transparent with what they are doing.

“You want to segment the right customer, an experimental customer who might want to do this with me. Then you want to build a community around these early stage launch ideas and message clearly that it’s an experiment… Be very transparent at every stage.”

Comstock suggested that by doing this retailers can form deeper relationships with their test customers. Retailers can leverage this even further by telling their customers that a new product was built by them.