As retailers from John Lewis to Shop Direct invest in retail labs the importance of internal innovation is more important than ever.
The way big businesses in the retail sector discover and implement innovation is shifting, with the launch of venture teams, accelerator panels and internal ‘incubators’ bringing a start-up mentality to corporate organisations.
They are embracing the concept of ‘intrapreneurship’, an entrepreneurial approach where teams and individuals are driving new venture ideas from within the organisation.
It can be defined as an entrepreneurial activity within a large established business, usually to address a new market opportunity or develop a new way of doing things, outside the normal scope of activities.
Intrapreneurship is also a change of mindset to thinking like an entrepreneur: seeing new opportunities, being completely customer-driven, making the most of limited resources and, above all, moving quickly.
Within many big retail organisations there are talented people with brilliant new ideas. The challenge is working out how to realise these opportunities and bring ideas to life.
Large retail companies have tended to focus on margin protection and improvements to customer experience while struggling to embrace new technology. The impact can be wide-reaching, including the loss of customers and reduced market share, as new entrants to the sector offer more disruptive, innovative products and services.
“Intrapreneurs are adept at landing in a company, making an impact immediately, delivering one or two big initiatives and then moving on”
Peter Sayburn, Market Gravity
This is where intrapreneurship comes in.
Intrapreneurs are adept at landing in a company, making an impact immediately, delivering one or two big initiatives and then moving on.
Retailers are now more willing to collaborate and work in partnership than they used to be, recognising that no one company can do everything itself. Organisations often look to acquire start-ups and SMEs to enhance their offering, but you can’t rely on acquisition alone for business growth.
Acquisitions are a great way to bring in complementary capabilities and technologies and can refresh the entrepreneurial spirit and culture within an established firm, meaning a combination of intrapreneurship and acquisition can work well.
We’ve seen some great examples of innovation and intrapreneurship from companies such as Rigby and Peller. This traditional lingerie retailer was quick to recognise the value of new technology and developed and launched an in-store 3D mirror. Recognising that some women were uncomfortable with personal underwear fitting, customers can use a digital body scanner – which takes 140 measurements as they turn 360 degrees –ensuring privacy and an accurate fitting.
Speed is key when it comes to intrapreneurship. These dedicated, purposeful teams can cut through the corporate layers that often slow up big companies.
We are witnessing an increase in the launch of venture teams, or internal ideas incubators, as well as in investment in research and prototype development. Research shows that 30% of retail companies have established dedicated innovation centres. This is an encouraging figure but there is certainly scope for more development.
It’s essential for retail businesses to work collaboratively with experts in this field, listen to creative new ideas from all levels and encourage a culture of change and innovation to facilitate commercial growth.
- Peter Sayburn is co-founder and chief executive of Market Gravity