Why Innovation Needs Its Own Space

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Innovation is the lifeline of every growth strategy. So much has been written about the subject that broaching it is likely to elicit an apathetic response; e.g. “we’ve heard it all before.” Yet amid all the theories and philosophies espoused as keys to innovation, one that deserves more exploration is the space where creative thinking takes place. And, this topic is not just about another office.

Innovation space1

Organizational culture

Organizational culture and an environment that encourages a flourishing of creativity are essential for every company, be it a start-up or established, if the goal is to lead by innovation. Every effort to brand itself in that manner involves elements of risk. In this context, the focus needs to be on the environment where risk can be measured without jeopardizing creative instincts.

Start with organizational culture. Companies, particularly long-established ones, usually operate in a default position with a traditional hierarchy that includes levels of upper and middle management. Such systems tend to foster risk-averse attitudes at the highest levels and a dismissive value of new thinking that comes from the lower levels of the hierarchy. Innovation is encouraged, but only if the risk is minimal. Start-ups and high growth ventures justifiably scoff at such restraints, but that does not eliminate their responsibility to measure and mitigate risk.

What does the space in which creative thinking takes place have to do with the holy grail of innovation? Consider the role of the non-traditional environment, the birthplace of successful start-ups. The classic example is Amazon, which began in a garage in 1994. While most young or high growth-oriented companies are not likely to become the next Amazon, they need to understand that innovation is fundamental to whatever success they may achieve. Obviously, non-traditional thinking is necessary for innovation and the same is true for the space where it occurs.

Innovation space2

Reinventing the workplace environment

Creativity is stifled in a risk-averse environment, usually in companies that cannot get past memories of failed efforts and apparently, in their view, unacceptable costs. What is needed is a different thought process and the space to encourage it. Here is where design intersects with culture in its ability to create space that generates divergent thinking. Traditional office spaces are sources of distraction and are often antithetical to creative thinking. An environment in which teams recognize and exercise the freedom to think differently is vital for fostering an innovative culture. Consider it an innovation zone that can be located within a company campus or far from it.

In the innovation zone, teams need to be free of unwanted interruptions and focused on creative problem-solving. The classic example is the legendary Lockheed Skunk Works where a small, brilliant engineering team created American’s first jet fighter aircraft, the XP-80, during World War II. According to historical accounts, the team, though located at the Lockheed facility in Burbank, Calif., functioned in a closed area inaccessible to non-team members and separated from the traditional business culture. Two decades later, the Skunk Works team produced the SR 71 Blackbird reconnaissance aircraft.

Today’s innovation zones, unlike the Skunk Works, do not have to be focused on one big idea. Usually, it’s the small steps that tend to yield greater results long-term. However, those in that particular space have to function as a team. One model is the scrum, a rugby term in which players lock arms to move the ball forward. In this case, scrum is applied to a software development team working on a new app. The team is divided into smaller segments that work within a very limited time frame, perhaps two weeks. Under the oversight of a scrum master, the team reassembles, reviews its progress and adjusts accordingly. It should be emphasized that despite all the expertise in creativity and innovation, nothing absolves the team and its leaders from risk management responsibility.

Short time increments are necessitated by today’s rapid pace of technological change and its likely impact on the app’s future in the marketplace. Much like the military’s rapid response team, the scrum should consist of members with wide-ranging skill sets who are adaptable to changing developments in the industry.

The idea is to create a workspace conducive to innovative thinking and free of the perhaps the biggest impediment to creativity: fear of failure. It is not hyperbole to emphasize the importance of creating critical space where design, flexibility for rapid response and a culture that thrives on both intersects. Such space may well be the determining factor of the innovative potential of the enterprise and its future.

Originally published in Leadership Briefings.

Lessons Grocers Can Learn From Department Stores: Lesson Ten—Amenities

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Customer amenities are the memorable extra steps that a retailer takes to understand and deliver on the needs of each guest. If done right, they bring true moments of surprise and delight.

Amenities

Grocery: It’s long been as basic as baggers offering to load groceries into a shopper’s car. Grocers have also successfully added other amenities over the years, including sampling stations, wine tastings, cafés and seating. In-store technologies such as ordering kiosks in the deli have also reduced wait times.

Department stores: Mirrors on every column and tester bottles in cosmetics are a given in most department stores. Restaurants and cafés have started to make their way back into the stores as well. The key amenity for all guests is a clean and well-lit fitting room that provides a sense of security and an organized wall system to compare clothing options.

Advice: With grocery stores adding more apparel, there’s a role for a better fitting room experience. And as beauty products become more standard, adding testers and mirrors will let shoppers know they’re making the right choices.

Aiming to outwit new competitors, the largest grocery chains are already investing in technological innovations like curbside pickup, automatic checkout, and delivery services to provide better service to customers and simplify the shopping experience. But as they evolve with this focus on technology, they should not overlook the many easy and relatively low-cost physical tweaks that can be made in stores to incorporate the best of the long successful run once enjoyed by department stores.

This is the Tenth and final Lesson of “Lessons Grocers Can Learn From Department Stores.” To view all ten lessons in their entirety, check out our full white paper HERE.

Lessons Grocers Can Learn From Department Stores: Lesson Nine—Services

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While physical stores can no longer compete with online retail for sheer product selection, the face-to-face conversations with experts and the services they provide are the greatest differentiator for brick-and-mortar retail. Whether the tailor or butcher, the personal connection builds a level of trust. As grocers adopt more of the traditional department store categories, what services will migrate over as well?

Services

Grocery: Many grocers began as the local butcher or neighborhood produce wagon, embracing the importance of community and family. Today, each grocer must find a balance between services and the commodities in the center of the store. Innovations in recent years have included adding clinics, catering, delivery, and curbside pick-up.

Department stores: Historically, department stores differentiated themselves by their specialty services and category expertise. Although they have ceded some of this space to competitors, they still offer beauty consultants, tailors, and personal shoppers and are successfully adopting in-store pick-up and recommitting to cross-training sales staff.

Advice: As grocers continue to expand their beauty and personal care sections, adding consulting services may be the next logical step. For food, what about party planning in addition to the already popular catering services? Understanding customer needs and what the competition is doing will greatly influence what services to add and their impact on grocers’ business models.

This is Lesson Nine of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One, Two, Three, Four, Five, Six, Seven, and Eight if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Eight—Check-Outs

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The last major touchpoint for the guest experience is at check-out, where a problem-free, positive cashier experience can reinforce the brand for a consumer.

Check-Out

Grocery: It’s taken more than 30 years for just one-third of grocery shoppers to adopt self-checkout kiosks. Now technology is being tested for automatic checkout that would eliminate the need for long, regimented lines of registers and cashiers.

Department stores: More than 30 years ago, stores seeking staffing efficiencies began phasing out multiple departmental registers in favor of centralized wrap stations, but that also reduced the perception of individual service and category expertise.

Advice: Maintain a variety of ways to check guests out without reducing the perception of service, as there is no one-size-fits-all solution for how individuals want to check out. Certainly, younger shoppers are more likely to adopt new technology, but it’s important to maintain traditional check-out methods for older guests.

This is Lesson Eight of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One, Two, Three, Four, Five, Six, and Seven if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Seven—Planning

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For most retailers, merchants wield a lot of power, battling over every square and linear foot of space for their department. It’s usually the last department merchant to touch the plan that gets everything they want. To make the customer journey work, the layout of each category and service needs to not only make business sense but also needs to be intuitive for guests as they walk through the store.

Planning

Grocery: At most supermarkets, there’s no evidence of a journey, as there’s little obvious connection between the coolers and their back-end requirements, the perimeter-focused service offerings, and then the center store aisles with their endcaps supported by co-op dollars and major brands staking out sections of gondola runs.

Department stores: Traditional department stores feature a center core with high-margin businesses on an axis to the main entrance, then the women’s shoe department stretching to the next area. The biggest decision has historically been whether to put the men’s department on the first floor or relegate it to the second level with the children’s department and intimate apparel.

Advice: As grocery stores continue to expand into apparel, beauty and accessories, at what point should there be a high-margin center core experience? Also, with the link between customer behavior and sales becoming better understood, there is now a role for technology in determining the most efficient and productive layouts.

This is Lesson Seven of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One, Two, Three, Four, Five, and Six if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Six—Customer Journey

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The customer journey is the intended story that unfolds as guests walk around and experience the store. This starts with the view from the street and the entrance, then continues with how they walk through the store, pay for their purchases and exit. It’s everything guests see and touch along the defined path, where each aisle creates vistas and focal points that draw guests to the next stage of their journey.

Grocery: An engaging journey is virtually impossible because of the walls of continuous cold cases and promotional endcaps that create vistas more than 100 feet long with few, if any, focal points. Guests shop the never-ending outside perimeter and must memorize the maze of gondolas in the center of the store. They’re left on their own to create “journeys” based merely on their shopping needs.

Department stores: Main entrances feature high volume/margin products, then guests traverse a series of rooms/departments. The rooms limit sightlines to a 30- to 40-foot vista, allowing a story to be created for each department. Aisles lead in the four compass directions from one room to the other, encouraging guests to wander, browse and discover more offerings.

Advice: Identify the intended customer journey for each guest profile and how the story of your brand should unfold. Does the aisle vista lead to a set of stock doors, or is it purposefully centered on a service offering, featured promotion or brand? Plan the cadence of messages around key moments of pause and physical touchpoints. Add surprise and delight by breaking up the long center store runs. What if the wine tasting or demo kitchen was in the center? A great story is memorable.

This is Lesson Six of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One, Two, Three, Four, and Five if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Five—Graphics and Signage

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At its core, wayfinding graphics are meant to help guests easily navigate around stores. It’s critical that there be a graphic hierarchy for key brand messages, departments, classifications, promotions, pricing, and policy. Technology and “branded architecture” also plays an important role.

Graphics
Brothers Marketplace – Waltham

Grocery: Differentiated department signage is king, as the signage stretches from the top of cases to the underside of the ceiling and runs from one end of the area to the other. Each graphic typically has separate themes with different colors, unrelated patterns, imagery, and fonts. Aisles are marked with classifications but then confused with multiple layers of promotions, sub-classifications, and pricing.

Department stores: Their two-tiered approach to wayfinding includes brand signage at the highest levels then pricing and product information at the merchandise level. Temporary promotional and seasonal graphics have their home at cross aisles, on displays, and atop cosmetic back islands.

Advice: Try this simple test. Take a photo of a typical grocery department and make a horizontal mark at the bottom of the page for each sign or message. If the marks create a nearly continuous line, you are asking the guest to absorb too many messages. There should also be no more than five vertical information points. Guests will appreciate a simplified and consistent graphics hierarchy in which where every message has a place.

This is Lesson Five of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Parts One, Two, Three, and Four if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Four—Brand Expression

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Are you trying to spotlight your corporate brand or the branded and private-label products you carry? Are you a “branded house” or a “house of brands?” Design and architecture play a major role in delivering your brand’s overarching message or minimizing it. What you should do depends on whether you’re trying to make your brand memorable and different compared to simply being a price leader.

Brand Expression
Roche Bros. Downtown Crossing

Grocery: It’s tough to tell a brand story amid a sea of metal gondolas and 15-foot perimeters with refrigerated cases and coolers. In most grocery stores, the brand story is relegated to signage above cases, the cash register light poles, and a series of black-and-white historic downtown images at the front.

Department stores: Proprietary architecture typically frames each category and brand, letting shoppers know that the store has a wide selection of curated merchandise or immersive “shop-in-shops” of other brands.

Advice: Own the envelope. Before the perimeter fixtures plans are finalized, carve out a foot or two where vertical architectural elements can bring aspects of a brand down to customers, so they can literally engage with the brand. Besides just a Starbucks shop in the coffee aisle, introduce highlighted zones within the aisle that describe special services, categories, and brands.

This is Lesson Five of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One, Two, and Three if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Three—Lighting

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Great lighting is the best way to catch shoppers’ attention and sell more product. The best approach is a layered one. Start with functional lighting that ensures shoppers can clearly read labels and employees can perform their jobs. Then add more lighting to spotlight key messaging, displays, and architecture.

Lighting
Roche Bros. West Roxbury

Grocery: In most grocery stores, high-bay lights placed at standard 16-foot intervals and long runs of continuous strip lights provide basic illumination with no differentiation. Sometimes, track lighting highlights produce bins while functional can lights are installed above service counters.

Department stores: Historically, department stores have utilized a sea of fluorescents over the merchandising areas and a moon-scape of recessed incandescent lights over aisles and showcases. Track lighting illuminates visual walls and displays, while decorative pendants and sconces are used for architecture and highlighted rooms.

Advice: Start with a base level of lumens to help shoppers read signage and labels, as well as to simply see the products. Add and aim spot lighting for apparel and produce displays to highlight from a distance, as well as enhance the products’ textures by creating deeper shadows. Plan out where to subtract light for dramatic contrast. Don’t forget to use any available natural daylight, as its proven effects include improving mood and lengthening the time people spend in stores.

This is Lesson Three of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lessons One and Two if you haven’t already.

Lessons Grocers Can Learn From Department Stores: Lesson Two—Visual Display

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Using your products to tell a story is a powerful way to inspire the imagination of customers. Whether customized at the store level or handed down from the corporate office, visual displays inform shoppers about seasonal trends, brand lifestyles, or product benefits—and engender confidence and purpose.

Visual Display
Brothers Marketplace – Waltham

Grocery: The best that visual displays get in most grocery stores is an organized, stacked, branded endcap with a large price sign. Sometimes, there may be plastic plants hanging off the refrigerated cases.

Department stores: Department stores dedicate space for visual displays along with entire budgets and regional teams of visual merchandisers, who use mannequins, display tables, toppers, plinths, and banners.

Advice: Customers expect—and enjoy—having their imaginations engaged. Grocers should break free from traditional boundaries and tell cross-merchandising stories that combine apparel, home, and food. Set aside areas for dedicated displays and redefine your show window.

This is Lesson Two of “Lessons Grocers Can Learn From Department Stores.” Make sure to check out Lesson One if you haven’t already.