It seems that every week I'm reading about another retailer who has formed an innovation lab or has acquired a startup to help them figure out innovation in the retail space. The latest round was the recent announcement that Target started its own innovation lab in San Francisco. This is in line with the trends of other big retailers such as Walmart, Home Depot, Nordstrom, and Staples - all of which now have their own retail technology innovation capabilities.
So two things come to mind in light of this trend:
- Is tech innovation becoming a significant differentiator for retailers, as important as the products themselves?
- If this trend continues, and there's no reason to think it won't, how do retailers that don't have the size and scale of a big box retailer compete?
Most retailers would agree that finding talent is a huge challenge. Often times the tricky part is in matching the right capabilities with the brand aesthetic and DNA of the company. With this new quest to find the best ideas we are surely on the cusp of an “arms race for technology talent.”
This is certainly a good thing for future technologists and the possibilities they have available to them. Let's face it - pursuing a career in retail IT wasn't ever really considered a cool and exciting career path if you wanted to be a trail blazer in the tech world. With an unprecedented platform to try new ideas and the willingness of retailers to invest in technology, we are surely in for some exciting times in retail innovation.
So, getting back to my original question, how do small to mid-size retailers scale to the level of innovation that will be needed to compete?
It surely can't just be on product differentiation alone. Share your thoughts in the comment section.