Thinking of opening an innovation lab?

To accompany a recent interview with Marc Bolland, chief executive of Marks & Spencer, the photos showed him in the company’s innovation hub next to their HQ in London’s Paddington.


Retailers looking to tap into its secret sauce

It certainly ticked all the boxes for what you would expect if this space was the home of a start-up technology company located just a few miles west in the capital’s Shoreditch and Old Street area.

This is the latest example of a large retailer opening such a hub that gives the impression of organisations that are up with events and not getting left behind as other more nimble, agile upstarts enter the market and look to eat the lunches of the incumbents.

To name just a few who’ve opened labs we have: John Lewis, with its JLAB incubator; Argos has a digital hub; and Tesco has its Tesco Labs as well as previously also having a Shoreditch hub following its purchase of Blinkbox (it has since been sold).

There is clearly lots of activity on this front but how much really comes out of these places that will benefit the parent business? Driving innovation in large companies is a whole lot more complex than simply opening a token lab, which operates in its own hermetically sealed environment well away from the rest of the organisation where it can escape any influence from the mothership. It’s very tough to push innovation into traditional businesses.

The key question is whether these retailers are also investing in their core infrastructures? When I was at Dunnhumby some years back the idea was to bring all the media elements together across its parent company Tesco and to then plug in Clubcard underneath to help deliver targeted messaging to specific customer groups. It might well have worked but the underlying platform at that stage was too decrepit to handle the laser sharp targeting which the company had planned.

If capital expenditure is not being delivered to the core business then innovation hubs can have the feeling of being simply nice-to-have, or adding a bit of fizz, or the icing on the cake. Whichever way you look at it, it’s not substantial.

Are these creative labs more of a distraction therefore from what might be the real big areas that should be addressed and represent the big potential opportunities? Speaking at a recent Retail Insider Breakfast event Mark Lewis, retail director at John Lewis, made the valid point that innovation is not just about glitzy front end digital initiatives and solutions but it can equally involve the supply chain behind the scenes. This is where innovations could really make a difference to a business but it does not sound that exciting and probably would not interest many of the people in these digital innovation labs.



Innovation can involve the plumbing

Lots of chief operating officers must sometimes get a little annoyed by the innovation guys throwing out ideas that can potentially be distracting from the big picture challenges faced by most retailers today.

The Retail Insider Digital Retail Innovations report that Webloyalty sponsors is a case in point when it comes to what innovations will have an impact – outlandish innovative ideas or more grounded initiatives?

Last year’s Top innovation was Google Glass while this year’s is Doddle. One could have changed the world but is now dead whereas the other is not a potential game-changer in the same sense but will likely have a meaningful impact over the long term.

Weighing up where to commit brain power and financial resources is one of the present day conundrums for retailers when they have so many avenues through which they could throw their precious resources.

To their credit, innovation labs are unlikely to suck in too much capital and if they are able to send out good vibes to jaded organisations and inject a go-getting (fail-fast) attitude as well as impressing shareholders then they undoubtedly have a role to play.

Guy (online only)Guy Chiswick, Managing Director, Webloyalty Northern Europe (@Webloyalty_Guy)