Retailers need an innovation strategy

Text saying 'Innovation' accompanies by a light bulb

Retailers need an innovation strategy

The retail industry is ripe for disruption. Spending is changing, consumer expectations are rising and Amazon is poised to launch in Australia. According to Morgan Stanley, Amazon is set to carve out a $12bn piece of Australia’s retail pie in the next decade. Now, more than ever, Australia’s retail players need to establish a long-term innovation strategy, to not only protect their market share, but to grow it.

There’s been a lot of chatter about the retail apocalypse. The argument is that Amazon will crush Australian retailers who won’t be able to compete on delivery or the user experience. There’s also been speculation that Amazon’s pricing model will result in a race to the bottom, undercutting profitability.

Sounds like Amazon is bad news for our retailers, right? Not necessarily. With great change comes opportunity, the question is who are the leaders who are prepared. A recent study by CBA showed that 25% of retailers have no strategy at all!

Rather than being wiped out by the arrival of international competition, it’s much more likely that local retailers will be forced to lift their game. If they can do that, then it might be they can take home a bigger piece of the growing pie too.

Obviously, this is easier said than done. In fact, sectors across the Australian economy are grappling with how they can create and implement an effective R&D strategy to future-proof their business and maximise earning potential.

The reality is that it’s incredibly difficult for a corporate to disrupt itself from within as the corporate antibodies take over to kill any idea which threatens the core. Big corporates are focused on servicing their existing business, revenue streams and customers, which means maximising efficiency at the expense of a long-term disruptive strategy. They’re also slow to respond to immediate threats. Thanks to technology, gone are the days of slowly shifting trends. New products and services can literally explode across a market leaving incumbent players behind. Pokémon took 3 days to travel the world.

That’s why we exist. As a business, Slingshot identifies industries that overdue for disruption and helps facilitate collaboration between corporates and start-ups. We’ve done this across sectors in food, travel, finance, health, HR, insurance, and now we’re going to do it in retail too with RetailTech.

Start-ups and corporates represent two enormous market forces. They are strikingly opposite in their strengths and weaknesses. Corporates have scale, resources, access to people and large customer bases. Given their size, they work to different speeds, levels of risk and culture sets. Start-ups represent the other side of those elements – they are risk takers, rule breakers, fast, agile, close to the customer, can pivot, change and reinvent more quickly. When you bring these two forces together, that’s when the magic happens.

However, we know an accelerator isn’t a possibility for every corporate. If you’re looking to collaborate with start-ups to harness new technologies and ways of thinking you can also do so via CoVentured. The platform lets you discover new talent and ideas, unlock business models, streamline and manage the way start-ups engage with your business and showcase who you are, and what you’re looking for so they can be better informed when they reach out.

At the very least, Australian retailers need to be better educating themselves about the options for R&D, new disruptive technologies and what key emerging businesses in the sector are doing so they can creative an informed innovation strategy.

This post was brought to you by Karen Lawson, CEO, Slingshot.

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