It is easy to ignore the ‘dreamers’ but retailers should find the visionaries in their teams and dedicate a portion of their innovation portfolio to bold experiments, believes Bain & Company’s Jonathon Ringer
The challenges of the last two years have forced the retail sector to innovate. We have seen new ecommerce and fulfilment models emerge, traditional stores repurposed, new payment solutions offered to customers and even new internal working practices.
Of course, the very best retailers have always innovated on behalf of their customers. The recent crises seem to have liberated decision making and accelerated the pace of innovation. But what about true breakthrough innovation?
“Real disruption is always driven by bold thinkers and visionaries who are prepared to make a leap”
Most strategy-setting processes include a cursory discussion on ‘imagining the future’ but very quickly narrow down on changes that will really have an impact on the next three-year plan.
The ‘dreamers’ are humoured but they are outnumbered by the ‘doers’ who quickly take over. The ‘wild ideas’ are dismissed and ‘common sense’ prevails.
But proper ‘future-back’ thinking is a critical element of any good strategy development process and bold experimentation is a key component of any good innovation portfolio. Real disruption is always driven by bold thinkers and visionaries who are prepared to make a leap.
Not so crazy
Last month, our team was in Dublin and we were introduced to Bobby Healy, the chief executive and founder of Manna. Bobby is a visionary. Manna’s humble mission is “to improve the world by making lightning-fast, suburban deliveries affordable, green and safe”. Manna is a drone delivery business. But drones are a crazy idea, right?
Manna operates out of Balbriggan, a coastal town 21 miles north of Dublin with a population of 35,000. Since the service was launched, 18% of the local population has used it and the company has already broken through its initial target of 200 orders a day. What is more, 77% of Balbriggan customers have ordered through Manna more than once and average orders per customer, per month is 1.6. Maybe not such a crazy idea?
Local customers log into the Manna app, confirm a delivery location (a flat surface with 1.5m diameter) and choose from the retailers and products available. After ordering, the drone is loaded manually and flies autonomously to its destination.
Balbriggan is a largely low-rise, residential area and the drones fly at an altitude of 50m to 80m, descending to about 15m at the point of delivery before winching the product down to the drop zone, where it can be released without human intervention.
Average outbound flight time is two minutes and 40 seconds, and drones can do roughly eight drops an hour. Manna’s all-electric drone delivery means fewer cars on the road, zero emissions and less noise pollution.
There is no recording equipment on the drone that might raise concerns about privacy (the aircraft has a downward-facing, AI-powered camera, which no human operator has access to, to ensure safety at the point of delivery).
Manna works with retail chains, including Tesco, and local independent retailers. The majority of its flights involve food delivery or small-basket convenience shops – the number one item is hot coffee. Today, it is still in pilot phase (forgive the pun) but Manna’s ambitions go far beyond Balbriggan and Ireland.
Where are your visionaries?
It is easy to be dismissive. We can all come up with the list of problems and barriers: customers will not pay for it; it will not work in heavily built-up areas; the regulation is not clear yet (at least, not in the UK – it is in the EU); the path to profitability is not yet proven. You only need to browse online forums to see the fierce debate on these topics, even within the ‘drone community’.
My point is not that drones are the way forward or that Manna will succeed, though I hope it does. My point is that retailers need to have bold ‘future-back’ innovation alongside the ‘today-forward’ change and incremental improvement.
We should not be only relying on entrepreneurs like Bobby Healy to do the dreaming. Retailers need to find the visionaries within their teams and dedicate a portion of their innovation portfolio to bold experiments.
At the very least, they should be a little less quick to dismiss the crazy ideas. What is your position on drones? What are you doing about autonomous vehicles? What about the metaverse?
If nothing else, retailers should make sure they build their new stores with at least a 1.5m diameter space on a flat roof.
- Get the latest tech news and analysis straight to your inbox – sign up for our weekly newsletter