1.
Innovation in Retail
How Retailers are changing the way they do business

2.
Edward Chenard
Working on Innovation at Target
Built one of the first Big Data systems in
Retail
Built Data Science teams
Built teams that have scaled to over
$100MM in 2 years
Twitter: echenard

3.
What is Innovation
“If I had asked people what they wanted,
they would have said faster horses.”
- Henry Ford
• Innovation is about arriving at a place we have never been
before by doing something we have never done before
• Innovation is about seeing the world through the eyes of your
customer
• It is about creating value by challenging the culture and “how
we do things”

4.
The Heart of Innovation is Revolution
It is about changing the world

5.
“Understand this, you’re not competing with
another company, you’re really competing for
time and attention.”

6.
Innovation is a series of
Evolutions
Data Centric
Silos
Specialist
Linking
Linear
Customer Centric
Collaborative
Big Picture Practitioners
Sharing
Frictionless
From To
Innovation is about arriving at a place we have never been before by doing
something we have never done before

7.
How to Approach Innovation
Innovation relies on trust and commitment. Reward the Brave

8.
What do Executives want from
Innovation?
0 20 40 60 80 100
New products & services for
existing customers
New proudcts & services to
expand new customers
New to world products
Cost reductions to existing
products & services
Minor changes to existing
products & services
Priorities
Priorities
www.competingvalues.com

9.
What Stops Them from Having
Innovation?
32
28
26
25
21
21
18
18
0 5 10 15 20 25 30 35
Lengthy Development Times
Lack of Coordination
Risk-Averse Culture
Limited Customer Insight
Poor Idea Selection
Inadequate Measurement Tools
Dearth of Ideas
Marketing or Communication…
Barriers to Innovation

10.
Inhibitors to Innovation
Personal Block Problem Solving
Blocks
Organizational
Blocks
• Conformity
• Following familiar
habits
• Enthusiasm without
thinking
• Lack of Imagination
• Self discipline
• Focusing on tools
not problems
• Lack of discipline
• Rigidity
• Poorly thought out
approaches
• Poor language skills
• Forcing group think
• Working in isolation
• Not enough
collaboration
• Policies over
solutions
• Too much belief in
experts
Innovation is hard, it is never going to get easy. Understand
the pitfalls along the path of building great products

11.
For innovation to work, you need to go
from idea to scaled product in a way that
allows you to reach your customers first
with the best value

12.
Relevance
Trust
Scaling
The Four Focus Areas of Innovation
Culture
Changing
Partnerships
Learning
Innovation
Conversion
Industrial era
management
tactics don’t
work with
innovation
Innovation
systems needs
to not only be
adaptive, but
often complex
systems that
are open
New
Technologies

13.
Ideation
Production
Planning
• Crazy should be
normal
• Focus on combining
ideas to solves
problems
• What is the future,
know it and plan for
it
• Think long term but
plan for small steps
• Build to learn
• Focus on stability
Being Unique has no value in itself,
innovation must create value for the
customer
Goal: Always build with the goal of scaling, without scaling you are
just funding someone’s hobby
Scaling
Think Different, Be Different

14.
Getting Started
Defining
what you
are doing
Creating a
cultural
framework
for the team
Information
that helps
you drive
decision
The
experience
of the
customer
Merging
data and UX
Data AlgorithmsProcesses UXStrategy
Today, innovation is a blending of many different areas of the business
to come up with new ways of engaging customers through repeatable
systems
Innovation systems needs to not only be adaptive, but are often
complex systems that are open. These are the models that survive,
the more closed the model, the less use it will have by customers.

15.
How to Build a Team
Innovation is a team sport, working in isolation is deadly

16.
“The best way to kill innovation is to let the boss speak first”

17.
New Methods
Merging Many Methods to Gain an Advantage
Innovation doesn’t fit in a single methodology
One Method No Longer Works
• Many companies only
employ one method or
poorly combine two. New
methods require combining
many methods to drive out
real innovation.
• Often Agile is used as a
method for speed but often
lacks big vision.
• Design thinking often brings
great user experience but
lacks speed.
• Product can bring great
business strategy but can
lack user experience.
UX
Agile
Product Management
Solutionist
Approach
Design Fast
Strategic Design
New Model

18.
Doing Product Management the Right Way
Learn from manufacturing product management
One Method No Longer Works
• Agile product management
just isn’t enough to get the
job done
• Product managers need to
be the small business
owners of their own
products
• Long view with quick
movements is the new
normal
Product Management

19.
Agile gives you speed
Agile works best in the development space
Agile, a method with its place
• Agile helps to keep your
development team moving
quickly
• Agile is not a method for
strategy or business
management
• Agile alone is not innovation
Agile

20.
UX, Where Design and User Experience Bring a Human Touch
to Innovation
Numbers alone don’t create innovation
User Experience is the special sauce
• User Design (UX) is not design, it
is the action that informs design
• It must be cross functional or else
it just becomes “something those
design guys do”
• Design think helps the team
balance the solutionist approach
that often is rampant with
technology innovation teams
• People are ruled by emotions, not
logic, build with that in mind
Design
Thinking (UX)

21.
When people think of innovation teams, they often
think of people like these

22.
Most innovation team members look like these
Studies have shown
that people over 50
produce more high
value products than
the under 34 crowd.
Over 45 have better
financial
understanding
Over 35 have the
experience needed
to work on multiple
work streams at once

23.
Key Players Your Team Needs
Idea Creation Implementation
Choices
Change
Culture
Actionable
Scalable
Repeatable
Connector
Keeps the team engaged with other teams
Customer Champion
Keeps the team focused on the customer’s needs
Creator
The magic maker, creates ideas
Revolutionary
Believes in change, driven to change the world
Troubleshooter
The problem solver, gets the team through challenges

24.
Enlist Deep and Diverse Domain
Experts
Not all Doman Experts work the
same:
Brokers: A person or group that
connects different clusters together.
Closure: Building trust within a
team cluster, the closer you are the
stronger the trust.
Betweeners: Critical linking
member between other teams that
can help the innovation team

25.
How to Sustain it All
Just because it works for Google, doesn’t mean it will work for you

26.
• Algorithms should not replace
strategic judgment.
• Data can give a false sense of
direction and security.
• Big data and data science are
not the same.
Technical Pitfalls Companies Often Fall Into

27.
Building Your Roadmap
Can we
win?
Is it worth
doing?
Is it
real?
Today’s assumptions don’t work for
tomorrow’s solutions

28.
One Roadmap is Not enough
Ideas and Strategy Roadmap
Focus on ideas and how those ideas will then help the
customer and business. No limits on ideas, use strategy
planning to help narrow down which ideas to follow
Detailed Roadmap
Research, production and scaling roadmap. A roadmap to
build these ideas to make them a working product that can
be used by customers
Collaboration Roadmap
Who outside of your team do you need to work with. No
idea grows in a single team, have a roadmap for
collaboration across the org or ecosystem

29.
Innovation RoadmapHave a roadmap to delivery and scaling
FY 14
Q4
Nov- Jan
FY 15 Q1
Feb - Apr
FY 15 Q2
May - Jul
FY 15 Q3
Aug - Oct
FY 15 Q4
Nov - Jan
Algorithm and Metric Monitoring
Research
Delivery
Operations
Social Interaction
Batch
Recommender
Real-
time
Recc
Search Data
Revenue
Attribution
Pipeline
for Rev
Display
Store
Display
POC
Store
Displa
y POC
Real-time recc
based on search
terms
Recommendation
s utilizing social
data
Desktop/Mobile/
Tablet specific
recommendations
Real-time
Inference

30.
Customer Experience Framing
Innovation
and
Customer
Emotional
Engagement
Source: XPLANE and Business Model Generation by Alexander Osterwalder
What do they
THINK & FEEL & FEAR?
what really counts
major preoccupations
worries & aspirations
What do they
SEE?
environment
friends
colleagues
what work offers
What do they
SAY & DO?
attitude in public
appearance
behavior towards others
What do they
HEAR?
boss
colleagues
influencers
friends
PAIN
fears | frustrations | obstacles
GAIN
wants/needs | measures of success | obstacles

31.
How can you reinvent the customer’s experience?

32.
Connect the dots across multiple touch points
Think of the memories you want to
evoke, then design for those memories
NOT what messages to communicate
or what media should carry them
Remember, innovation is about the
customer, not the technology

33.
Thank You