At NRF 2023, industry-insights firm Incisiv and Toshiba Global Commerce Solutions showcased findings from their new executive survey, “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 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 just 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.”
According to the study’s findings, unifying the customer experience across digital and physical channels is the top innovation priority for retailers. The brick-and-mortar store plays a crucial role in this aspect because 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 retailer’s need to find new ways to solve the critical challenge of unification across digital and physical channels in order to drive growth,” added Fredrik Carlegren, VP marketing & communications, Toshiba Global Commerce Solutions.
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.
The study surveyed 233 retailers. 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%.
Click here for a free download of the report, “State of the Industry: Innovation in Retail.”