With an insatiable appetite to capitalise on what it considered hot trends, Tesco hurried into an unknown market (to the grocer) that was already saturated.

With an insatiable appetite to capitalise on what it considered hot trends, Tesco hurried into an unknown market (to the grocer) that was already saturated.

“Failing fast is the motto the most successful start-ups hold most dear, as every failure puts them one step closer to success.”

Stephen Millard, chief executive Eccomplished

Did no-one stop to ask the customers if they wanted any of these services? Needless to say, it was an expensive mistake.

The past few years especially has seen retailers heavily investing in technology – and some have gone as far as to say we’re at a point not too dissimilar to the dotcom bubble – set to burst imminently.

However Tesco’s acquisition of Blinkbox and Morrisons’ acquisition of Kiddicare are nothing to do with technology and is more about a fundamental failure in strategy. Too many retailers are basing their business model on the Amazon-effect: the premise that by copying a successful rival you will continue to grow, regardless of your knowledge on the subject.

Innovate, don’t imitate

Amazon makes tablets, so Tesco has tablets; Amazon has LoveFilm, so Tesco goes with Blinkbox. Instead, focus on using technology to support your stated strategy, not copy a perceived competitor.

The fundamentals of business strategy still apply – understanding the unique value you offer to the customers you choose to serve. Retailers must innovate within their existing model, putting technology to work for them and their customers.

But this only happens when careful consideration is given to how the technology either enhances the shopping experience or increases a retailer’s ability to serve them better.

In many ways however, retailers are still playing catch up with consumers. The UK leads the way in digital retail as mobile shows no sign of abating. We spend at least double per head online than the next biggest economy and that is creating a vibrant retail tech industry and marketplace fuelled by ambitious and innovative start-ups and investors, as well as highly innovative agencies and thinkers.

We therefore have an incredible opportunity to present ourselves as the global leader in retail tech, but retailers must embrace this community to build this market and their success.

Sorting the wheat from the chaff

Sorting out which technologies to invest in, and getting in early, isn’t easy though and how do you sort the wheat from the chaff?

Retailers should build relationships with the retail tech incubators, accelerators and investors – the communities need each other to succeed.

It saves a lot of time, budget and frustration in sifting through the masses. Networking also plays an important role and sharing ideas and experiences – get out of the office/shop and talk to industry counterparts – go to events and shows and listen.

Nothing is fool proof, as we’ve seen with Tesco, but don’t be put off making investments and being prepared to fail. Failing fast is the motto the most successful start-ups hold most dear, as every failure puts them one step closer to success.

  • Stephen Millard, chief executive Eccomplished