Retailers are innovating to help solve foundational challenges, including inventory visibility, personalization and unifying physical & digital experiences
Incisiv, a next-generation industry insights firm that helps retailers and brands navigate digital disruption, and Toshiba Global Commerce Solutions, a global market share leader in retail store technology and the industry’s first choice for unified commerce solutions, announced at NRF 2023: Retail’s Big Show their findings of an executive survey, titled State of the Industry: Innovation in Retail.
The study found that only 17% of retailers can be considered true innovation leaders, despite the majority recognizing the critical importance of innovation for future growth. The study, which surveyed 233 retailers, found that innovation leaders outperform their non-leader counterparts in key business metrics, such as revenue growth. Retailers who are leaders in innovation have a three-year revenue CAGR of 6.2%, whereas non-leaders have a three-year revenue CAGR of 0.7%.
“Retail is a highly competitive industry, and the ability to innovate is essential for staying ahead of the curve,” said Giri Agarwal, Chief Insights Officer, Incisiv. “Our research shows that there is a significant opportunity for retailers to improve their innovation capabilities and, in turn, drive better business performance.”
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“Retail is a highly competitive industry, and the ability to innovate is essential for staying ahead of the curve”
According to the study’s findings, unifying the customer experience across digital and physical channels is the top customer experience focused innovation priority for retailers. The brick-and-mortar store plays a crucial role in this aspect, as it offers customers the ability to physically interact with products and engage with the brand in person. By leveraging the store to enhance the online customer experience and integrate it with mobile and digital channels, retailers can create a seamless and personalized journey for customers. The data from the study revealed that 83% of retailers are scaling or exploring initiatives to help them unify customer journeys across digital and physical channels.
“The findings of this research are an important reminder that retailers need to find new ways to solve the critical challenge of unification across digital and physical channels in order to drive growth. At Toshiba Global Commerce Solutions, we are committed to working with retailers to help them understand and improve their customer experience capabilities across all channels,” added Fredrik Carlegren, VP Marketing & Communications, Toshiba Global Commerce Solutions.
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Additional findings of the research include:
- While 92% of retailers acknowledged the importance of innovation for future growth, only 22% actively encouraged and rewarded risk-taking and experimentation within their organizations. This disconnect highlights a lack of alignment between retailers’ stated beliefs and actual practices when it comes to fostering innovation.
- Retailers’ operations-focused innovation priorities are centered around foundational capabilities such as inventory visibility, with 76% of retailers either scaling or exploring innovation initiatives in this area.
- Innovation in inventory visibility goes deeper than simply exposing available inventory. Leading retailers are focused on utilizing the intelligence gained from inventory data to create better shopper experiences across channels. For instance, 65% are scaling or exploring initiatives to help them provide narrower and more accurate delivery estimates to shoppers.
Moreover, the report includes categorization of key technologies such as artificial intelligence, process automation, robotics, and Internet of Things across an adoption maturity spectrum, helping retailers understand where they fall among peers in these areas.
Incisiv conducted a hybrid online + Computer Aided Telephonic Interview (CATI) survey of 233 retail executives in the United States. The study was conducted from December 8, 2022 – December 21, 2022. Sixty percent of respondents were vice-president level or above, including 32% of those in senior vice president or C-suite roles. Executives from large retailers (annual revenue >$1B) made up 55% of those interviewed, with respondents from retailers of revenue ranging from $100M to $1B rounding out the remaining 45%.
Retail executives were asked to evaluate the areas of focus around innovation in their companies as well as their opinions on the inter-company culture and strategies to accelerate innovation.
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