2. WHAT IS THE NEED FOR RETAILERS TO INVEST IN
INNOVATION LABS?
• CONSUMER BEHAVIOR HAS CHANGED. “HOW, WHEN AND WHERE PEOPLE SHOP”
• TO REINVENT CUSTOMER EXPERIENCE AND DRIVE LOYALTY TO BOTH CUSTOMER AND EMPLOYEE.
• TO DISCOVER AND INCUBATE THE IDEAS AND TECHNOLOGIES THAT WILL HELP PREDICT AND
DIRECT THE COMPANY'S FUTURE.
• CHANGES IN TECHNOLOGY DRIVES RETAILERS LEFT WITH NO CHOICE BUT TO TRYAND STAYAHEAD
OF COMPETITION.
• RETAIL INNOVATION IS A RACE, AND COMPANIES OF EVERY SHAPE AND SIZE CAN ILLAFFORD TO
LAG BEHIND IN TODAY'S WORLD.
• TODAY BIG RETAIL TITANS LIKE AMAZON AND WALMART , WITH THEIR INNOVATIVE LAB PRACTICES
ARE INFLUENCING OTHER SMALL / BIG RETAILS ACROSS THE SECTORS
• EXAMPLE 1 - AMERICAN EAGLE OUTFITTERS INC. HAS BEEN PLANNING TO EMPLOY A 100 EMPLOYEE
LAB THAT WILL SEEK NEW WAYS TO LEVERAGE THE CLOTHING RETAILERS 1,100.
•EXAMPLE 2 - THE HOME DEPOT INC. FOUNDED HOME DEPOT LAB IN AUSTIN, TEXAS, AFTER
ACQUIRING BLACK LOCUS, A PRICE COMPARISON ENGINE THAT HELPED RETAILERS MAKE DATA-
DRIVEN PRICING DECISIONS.
5. 5 LESSONS FOR RETAILER TO REMEMBER
BEFORE STARTING AN INNOVATION LAB
1. To Keep Innovation teams intimate and diverse :
• Small groups of teams allow fast faced results, Promoting team bonding and inspiration. People then tend to
think and act collaboratively.
Example – Home Depot’s “Black Locus”
• Diversity is highly important- Team members with different skills generate ideas of greater breadth and
eventually leads to execution is multiple directions when needed.
2. Separate the lab from the headquarters and cater to creativity
• Creativity and sustainable collaboration easily gets thwarted by established bureaucratic processes and
roadblocks that are all so common in medium to large retail companies. Example, Wal-Mart, headquartered
itself in Bentonville
• Telepresence capabilities and hoteling options give the lab a connection to the parent company.
6. 5 LESSONS CONTINUED
4. Explore partnerships & acquisitions to launch or enhance an innovation lab.
• To partner with lean start-ups that are already equipped to operate an innovation lab for a large retailer.
• Example, Wal-Mart acquired 13 lean start ups since February 2010, allowing to incorporate new technology
while enhancing old one’s. Incorporating new talent into the lab and to remain ahead of emerging
technologies.
5. To Pursue innovation in key focus areas
• By bringing benefits and convenience of emerging technologies to complement in store experience – touch
screen, mobile devices etc.
• By using Big-data to provide customer personalized experience.
• To enhance online search, efficient delivery tracking, customer care services. Example Wall-Mart Labs
launched a social gift finder app that integrates with customers Facebook profiles.
3. Follow lean and agile methodologies; strive for continuous delivery and
design.
• Prototyping to gather customer feedback in a cheaper and quicker way
• Time framed validation of new ideas
• The idea is assessed for viability and further plans are developed if the idea is
considered viable.
• Follow up on through meetings and story maps to understand consumers
• Example : Sport Check, Canadian Brand .
7. INNOVATION LABS
• Fueling companies growth
• Inside on making company better
• Expanding to different retail platforms
(creating as many touchpoints as possible)
• Predicting trends through shopper data
Different Types of Retailers Joining
“Innovation Craze”
• Walmart
• Walgreens
• Lowe’s
• Staples
• Zappos
• JC Penny
• Capitol One
• Sephora
And Amazon…......duh
8. ZAPPOS LABS
• Located in San Francisco,
CA
• Creative environment and
workspace to get “creative
juices flowing”
• Hires locals via Craigslist to
weigh in on new
prototypes
• Launched Ask Zappos - Summer 14’
• Lets user text, email or share products via social media
• Pinpointing- matches person’s account w/ recommended projects
9. Lowe’s Innovation Labs
• Labs located in LA and
Mountainview, CA
• Tackle overwhelming
experience of shopping
at a hardware store
• “Science-fiction
prototyping”
• Two Major Projects
• The Lowe’s Holoroom
• Self-roaming robots
(OSHbots)
• 3-D Printing and Scanning
10. THE FUTURE
Iterate
• Created by Jon Nordmark
and professionals Apple
and PowerReviews
• Rapidly test curate and
validate emerging
technologies, for a
collection of large
companies
• Large companies avoid
high cost of invention
and ownership
11. THE FUTURE
continued...
Westfield Group- “Mall of the Future”
• Westfield San Francisco Center- Home
of Westfield Labs
• Owns and operates more than 40
shopping malls globally
• Rethinking how consumers today shop
while plugged into their phone and
social media
• Mall itself is testing ground
• Digital store fronts
"There's still growth on the Internet, but there's more
growth in fitting digital into the physical world,"
McKenzie says about digital marketing.
12. BIBLIOGRAPHY
• J., Nordmark. (2015, September 2). Innovation labs become part of the formula for retail success.
Retrieved February 16, 2016, from https://www.internetretailer.com/2014/09/02/innovation-labs-
become-part-formula-retail-success
• Nordmark, J. (2014, June 19). Retail Innovation Labs in the Bay Area. Retrieved February 14, 2016,
from https://www.linkedin.com/pulse/20140619151046-6907-retail-innovation-labs-in-the-bay-
area-indiana-seattle-illinois-austin-new-york-city
• A., Fiorletta. (2015, October 27). Innovation Labs Help Retailers Keep Pace With Industry Shifts.
Retrieved February 16, 2016, from http://www3.retailtouchpoints.com/a/innovation-labs/
• A., Sachs, & A., Kundu. (2014, June 30). 5 Lessons to Remember When Retailers Set up Innovation
Labs. Retrieved February 16, 2016, from https://www.thoughtworks.com/insights/blog/5-lessons-
remember-when-retailers-set-innovation-labs
• Johnson, L. (2014, November 18). Meet 7 Brands That Are Building the Future of Digital Retail
Through Innovation Labs. Retrieved February 11, 2016, from
http://www.adweek.com/news/technology/meet-7-brands-are-building-future-digital-retail-
through-innovation-labs-161470
• Pearson, B. (2015, July 20). Shopping Mall of Tomorrow: How Westfield, Walmart are Stripping
Convention (Part 4). Retrieved February 15, 2016, from
http://www.forbes.com/sites/bryanpearson/2015/07/20/shopping-mall-of-tomorrow-how-
westfield-walmart-are-stripping-convention-part-4/2/#4874793a51fb
• Travers, B. (2013, December 12). Digital Billboards – More Pressure on Physical Retail Stores.
Retrieved February 15, 2016, from https://www.auction.com/blog/digital-billboards-more-pressure-
on-physical-retail-stores/#sthash.ohhYUbYw.dpbs
