usiness. But when retailers are consumed by the day to day running of a business, it becomes extraordinarily difficult to work on step changes within the business. Historically, the majority of retail innovations came from entrepreneurs who seized upon a market opportunity versus established retailers. But today, in this landscape, we are happy to report retail innovation is alive and well. From admired large retailers to smaller new entrants, retailers are taking courageous steps to harness opportunities created by the dramatic shifts in consumer behaviour and build their business fitness. Retail Innovations 8 study Retail Doctor Group, in conjunction with Ebeltoft Group, a worldwide group of retail experts, of which we are the Australian representative member, has been formally tracking trends in retail innovation across the globe for more than a decade. During this time, we’ve seen an enormous change within our society, the customer and the retail stores that serve them. Change is not always apparent, and by formally tracking retail innovation, we have a means to catalogue and share the changes as well as predict where retail may head in the future. The latest study, Retail Innovation 8, collates well over 100 innovation cases from more than 20 countries, including Australia, compiling the trends and key themes that emerge from the study as a whole. These cases demonstrate both the diversity of innovation that is occurring globally as well as the remarkable emergence of consistent themes that play out on a global basis. This is undoubtedly due to the rapid spread of information and perhaps, common global consumer needs being addressed. Change in retail is influenced by key changes in the demography of the global population. Rising (or falling) incomes, ageing populations, and shifts in ethnic make-up begin to drive key behavioural changes among shoppers. They become increasingly concerned about wellness and time management, and priorities shift as they move into different stages of their lives. Technology allows them to have more control over their shopping behaviour and access infinitely more choice. While these changes occur naturally over time, the real notion of innovation is fuelled by accelerants or disruptors in the marketplace. Advances in technology access, for example, become a huge accelerant to change, as does a global economic recession, which is forcing vast numbers of consumers to rethink their priorities. But true innovation comes into play as well. Entrepreneurs, small retailers, and even retail giants seize upon these major trends to create something new and different in the marketplace. Combined, these become new inflection points, resulting in major changes in the way we see businesses go to market. It’s easy to spot these changes when we reflect back upon retail history. It’s more difficult, but ultimately more beneficial, to understand and react to these changes as they’re happening now. Retail Innovations 8 examined the collected cases and found a number of broader themes emerge. These themes could well become tomorrow’s inflection points. Let’s take a look at the innovation theme findings from the study. Curated collections The heart of successful retailing lies in creating a coherent and compelling assortment for customers. It’s the job of any retailer to be an effective merchant, selecting the best products they can to create a coherent offer. So, the notion of curated retailing is certainly not new – what has changed is the consumer’s ability to access goods from a much broader (and global) variety of providers. With the customer able to tap into nearly infinite access to products, this puts even more pressure on retailers to develop a clear and meaningful offer. Simply having a broad selection of products is no longer a differentiator – bringing these products together in unique ways offers retailers an ever-changing way to innovate. This year, multiple cases in the study focus on innovatively creating assortments, no longer solely based on category, but on a broader lifestyle view of the consumer. Eco-friendly – green is good The trend towards green-tailing seems to ebb and flow with the economy. While green was the hot topic just a few years back, it seems to have lost some steam in recent years. Much of this can probably be attributed to the economy. Most consumers still express a preference to behave in an eco-friendly manner, but the practical realities of budgets and performance of green products has slowed the trend. While it has slowed down, it has certainly not disappeared. This year’s innovations reflect the many paths towards green, from environmentally-conscious buildings to product driven offers that build entire formats around sustainability. Hyper-local There is real power in truly being local. Having the right products sourced from communities speaks to powerful macro trends around freshness, sustainability, and supporting the local community. It also speaks compellingly to safety and the consumers’ desire to become better educated and more demanding about the products they’re consuming. Retailers, large and small, are focusing on going local. Really local. In this year’s innovations, there are extraordinary efforts underway across multiple countries to highlight local offers. Service experience 2.0 The ability to buy almost anything online places pressure on retailers and service providers to effectively differentiate their offer. For intangible offers (insurance, banking), physical presence provides a new way to interact with the customer. Ironically, the growth in online access highlights the need for a physical space to truly connect with customers. Service providers must figure out new ways to provide a compelling retail experience, and they must do this in an environment where consumers are becoming increasingly wary of being ‘sold’ to. Innovation cases highlight new ways to create a service experience to the consumer that are about experiences and connections, not just selling. Technology intervention Technology itself is not innovation; it is what the technology enables customers to do that provides us with a glimpse of true innovation. There are marvellous examples of technology that provide consumers with more choice, access, and information than ever before. In this year’s innovation cases, technology helps provide 24 hour access to goods and services, access to detailed information about products, seamless checkout experiences, the ability to precisely customise an offer, and real time access to inventory that helps improve in-stock and tie together the online and offline world. Customisation and crowdsourcing Increasingly, customers are playing an active role in defining and determining the assortment. Consumers are no longer just passive recipients of what a retailer ‘thinks’ they might want, they are active participants in the creation of the retail offer themselves. From user-submitted ideas to voting on favourite products, retailers are ceding more control of the store to their customers. Alternatively, they’re allowing the customer to essentially drive product development to create a truly customised experience. Online offline mashup A new retail era order is here. It will seamlessly blend the online and offline retail experience, allowing customers to shop where and how they want, at any time. Online tools are being adopted for instore use to bring the immediacy of online into the bricks and mortar world. We’re at our infancy in truly seeing the impact of these efforts. There’s no question that the majority of innovation, both now and in the future, will demand that retailers offer the customer the best of what the physical and virtual world have to offer. Bricks and mortar retailers are clearly beefing up their online and cross channel capabilities, but in an interesting twist, online players are now using physical space to attract customers. This mashup of online and offline retail will continue to drive new innovation. Retailvention While innovations in retail are exciting (and risky), the biggest changes in retail from a volume perspective occur when retailers attempt to reinvigorate mature businesses. Innovation is occurring as existing retail businesses look for new ways to remain relevant to their consumers. Retailvention cases demonstrate how a concept can change through the addition of new categories or services or simply a more dramatic way to showcase assortments. In conclusion, retail innovation really is alive and well and individual retailers that are poised to take advantage of these innovation trends have the opportunity to thrive in the future and position themselves as a truly fit retailer within the global retail marketplace. This story originally appeared in Inside Retail Magazine. The August/September issue, featuring exclusive coverage of the 2013 Westfield World Retail Study Tour is available from this week. For more information, click here. * Brian Walker is founder and CEO of the Retail Doctor Group. For more from the Retail Innovations 8 study, the report can be downloaded at www.retaildoctor.com.au/RI8.