When it comes to retail innovation, the difference between being average and being best-in-class all comes down to one thing: Focus. In terms of adoption percentage, factors driving adoption, and the level of importance assigned to areas impacted by technology, the degree of focus makes all the difference, according to recent studies by Aberdeen Group.
The company's recent surveys examining retail technology innovation found that best-in-class retailers tend to have a comprehensive approach to their adoption decisions, keeping the impact to the entire organisation in mind when making area-specific decisions. But others - retailers as a whole - tend to make decisions to meet a current need in a particular area without taking the large-scale impact into consideration.
For example, survey findings showed that 25% of all respondents (compared to 45% of best-in-class) currently use or plan to use contactless payment systems. The main pressure driving contactless payment adoption for best-in-class retailers has been shorter transaction times, while the main driver for other retailers has been an increase in customer demand.
When it comes to the critical area of retail promotion optimisation, adoption of new and innovative technologies among best-in-class retailers is driven by the desire to improve cross-enterprise visibility into planned promotional activity (47%). But 63% of other retailers said they had adopted promotion optimisation systems to improve product category margin and profit - arguably a much more short-term goal.
Areas in which promotion optimisation technology are considered "very important" also varied. For best-in-class retailers, these included cross management and scorecards, assortment planning, and category and channel budget management. Other retailers cited merchandise planning, pricing, and strategic planning and forecasting.
Longer, wider focus needed
Ultimately, each retailer must prioritise pressures to make decisions that best serve its own needs. But, with a continually fast pace of technological change, retailers also need to keep an eye on their industry peers and leaders in order to remain competitive. As Aberdeen's survey findings suggest, to become best-in-class, retailers must learn to plan and reason like the best-in-class, and make long-term decisions rather than focusing on the short-term.
But simply copying best-in-class competitors is not enough: Adopting a new technology or performing a new task without truly understanding why or how the action is being done is not as effective because a disparate focus will change the outcome. The best-in-class retailers are innovators because they embrace new ideas, processes, and technology before the rest of the industry. Their broad focus is, according to Aberdeen Group, very likely to be the underlying reason for their stronger performance in the marketplace.