Comment: Is innovation in retail ambitious enough?

We retailers can justifiably be proud of our ability to innovate - it’s in our blood.

Day-in, day-out we create new products, new store and online experiences and a never-ending array of promotional mechanics.

I miss Monday morning trading meetings and all the ideas flying around to improve the coming week’s sales.

And this innovation makes a huge difference - any one percentage point sales gain or loss impacts a highly leveraged retail profit and loss statement, and even more so market sentiment and our colleagues’ morale.

But we are now faced with an age of unprecedented disruption. Not since the birth of the self-service supermarket 60 years ago have we seen such seismic change in retail.

Online trade is bringing new and highly nimble competition. Consumer expectations are becoming ever-more challenging. And this is before we even talk about macro-business forces such as globalisation or the supply of talent.

The age of disruption we’re living through challenges the very role of retailers, so it figures that we need quicker and more fundamental innovation - right to the core business model. This demands deeper innovation skills and behaviour.

I admire Kingfisher boss Ian Cheshire. He talks about innovation eloquently but it’s not just all talk - Kingfisher invests significantly in the structures, skills and behaviour of its workforce to innovate within the business.

He pushes the business to think differently about its model and how it maintains relevance across different channels. Kingfisher’s One Team Product Show a couple of weeks ago in Lille - showcasing 10,000 products from 400 suppliers - is evidence of how people in the company work with suppliers on product innovation, which is sometimes truly breakthrough. This investment and attitude is revolutionising its own-brand and protecting it against pure-price players online.

So it was no surprise to hear Ian anticipating the arrival of dynamic pricing, enabled by shelf-edge technology. This prediction is just one element of a fundamental change in price competition. For example, how will price transparency of individual products and whole baskets change the role of promotions? How will increased personalisation impact price comparison? Different price competition is just one of myriad disruptive forces facing retail.

There are an unprecedented number of questions that retailers are now having to consider and then react to. They require us to have more than just an incremental approach to innovation, as important as that will still be.

We also require much more expansive thinking - seeing multiple future possibilities, creating multiple options, experimenting, iterating and embracing risk for long-term gain.

Retail leaders don’t always need to have all the answers but it is essential to create conditions for more disruptive thinking to flourish.

Leaders that are seen to look to the horizon, ask the more searching questions, encourage adventure and take audacious decisions are those who will turn disruptive threats into new opportunities.

• Matthew Cushen Director, ?What If!