Strategies for In-Store Innovation

Minneapolis — Compared to the rapid rate at which retail innovation occurs online, the brick-and-mortar world often appears frozen in time. The result, says Tony Bynum of retail activation firm RTC, is a gap in shopper experience that makes many traditional retailers appear to be moving backward in contrast to digital trailblazers such as Amazon.com, Apple’s iTunes and Pandora.In a presentation at the Shopper Marketing Conference & Expo in October, Bynum, RTC’s director of client innovation and program strategy, shared an assortment of tactics that retailers are currently using to help narrow that gap. Across a variety of sectors throughout the entire industry, he said, progressive retailers are providing dynamic, unique in-store experiences to keep pace with shoppers’ rising expectations and evolving definitions of value.“We looked at a lot of programs and studied the challenges retailers are facing and what kinds of innovation is out there,” Bynum said. “Among the things we learned is that much of it is happening with the smaller niche players. So if you want to become more innovative, you definitely have to be aware of the fringe.”Bynum identified four main categories of retail innovation, which he defines based on the intended goals of a retailer. From these larger categories, he provided 14 specific types of innovation in the form of examples from actual retailers. Below are the four categories and 14 types of retail innovation, with one of Bynum’s current examples from each category (see sidebar for all 14 examples):1. Relationship and ConnectionRetailer’s goals: define value and relationships, strengthen connection, build loyalty. Types of innovation: activate community; mediate value and exchange; provide greater transparency; orchestrate solutions; showcase legacy and heritage. Example: State Farm Next Door.Recently launched in Chicago, State Farm Next Door is a financial learning space that has the look and feel of a modern coffee shop and offers classes, coaching and, most importantly, a living, breathing community with which customers in the market for financial planning and guidance can interact without being exposed to, according to State Farm, “the cheesy sales pitch.”2. Activity and InteractionRetailer’s goals: Use novelty and narrative to engage, inspire and motivate. Types of innovation: create individualized experiences; facilitate experiential trial and sampling; invite multisensory engagement. Example: Nike’s Custom Build It platform.Shoppers in the running department at brick-and-mortar Nike stores can create their own individual profiles using in-store Apple computers to better match them to the right products based not just on personal comfort and style preferences but also on the customer’s own training habits, injury history, competitive goals and other criteria.3. Physical and ContextualRetailer’s goals: leverage space, time and place to differentiate and expand presence. Types of innovation: develop spatial equities; expand touchpoints and presence; cohabitate complementary brands. Example: Eataly Chicago’s combination of dining, housewares and fresh produce.The main objective of this year-old, 63,000-square-foot European market-style “grocer” is to stimulate the shopper’s senses with an impressive collection of eateries, gourmet foods, fine wines and beautiful housewares all displayed in relatively spectacular fashion.4. Structural and OperationalRetailer’s goals: broaden offerings, ease decisions and unlock tapped value. Types of innovation: leverage third-party offerings; use data to inform experience; reduce purchase and selection friction. Example: C&A’s Facebook “Likes” displayed on hangers.The Brazilian fashion retailer introduced hangers in stores that digitally display the number of Facebook “Likes” each item has earned, with the numbers changing in real time every time a user on C&A’s Facebook page clicks “Like” for a particular item.

Strategies for In-Store Innovation

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