Over the centuries, retail has blossomed into an industry that supports millions of store employees, tens of millions of people in ancillary industries, and hundreds of millions of customers. It is at the heart of our cities and towns, and is the lifeblood of global societies and economies. Retail is the place for people everywhere to access the future of fashion, food, payments, beauty, health, entertainment, services, and increasingly, medical support.
Since the Retail Industry Leaders Association’s (RILA) inception nearly half a century ago as the Mass Retailing Institute, we have ridden the tide of the industry’s expansion to the chain store age of today. We have observed the pioneering efficiencies and scale that characterize retail’s current dominance. We saw industry behemoths grow from their earliest days. We have witnessed the difficulties of layoffs and store closings, and we have experienced the excitement of new retail channels being born and prospering.
In the past few years, we’ve experienced the seeds of transformation to a new age of retailing. U.S. and global consumers are driving change at an unprecedented rate. Ubiquitous internet access, uncertain political dynamics, and changing consumer values, preferences, and lifestyles have led to disruption in virtually every industry; retail, perhaps more than any other. This digital revolution continues to transform the way customers buy and interact with retailers and products. And the pace and depth of these changes are accelerating. The new retail landscape poses risks, but also fertile soil for many new opportunities.
A Bridge to the Future
To address this new reality, RILA, in partnership with Accenture, launched (R)Tech Innovation Center and an accompanying “(R)Tech” brand for the retail, innovation, and policymaking arenas. (R)Tech is a term that describes the confluence of retail and technology; it is meant to impassion entrepreneurs for, and direct venture funding to, technologies, ideas, and startups that help the industry. It also reinvigorates retail’s reputation with innovators, the next generation of retail talent, policymakers, and the public. This new term is intended to signify the union of retailing and technology and to ignite transformative innovation.
(R)Tech innovations are sprouting from all directions. Smart devices are opening markets for new categories of products. Virtual reality is a channel for completely new and immersive experiences. 3D printing holds the potential for us to create anything, anywhere. Artificial intelligence, blockchain, the gig economy, big data analytics, FinTech, and more are accelerating change in all aspects of the industry. Taken in sum, this is (R)Tech.
(R)Tech is the gravitational field attracting dreamers, entrepreneurs, innovators, and investors into retail’s orbit. The first wave of these (R)Tech innovators are already defining retail’s future.
Emergence of the Retail Chief Innovation Officer
To harness and centralize retailers’ responses to this highly dynamic marketplace, visionary CEOs have created a relatively new operating role for the industry: the chief innovation officer. Our research finds that most innovation chief positions are three years old or younger.
The role is multidimensional. And the challenges – prioritizing projects, obtaining funding, sourcing the right talent, and transforming the corporate culture – are daunting.
Creating Cultures That Thrive
The most critical goal for retail leaders is to build a culture of innovation. Effective retail innovation chiefs build a talented team to further internal relationships and navigate the external innovation ecosystem. They open executives’ eyes to the changing marketplace, exposing them to new ideas that may ultimately succeed or fail. What’s more, they create the infrastructure to solicit and propel the best ideas from employees across the organization. A strong innovation chief works with the CEO and other leadership team members to instill a culture of innovation throughout the company.
In the (R)Tech Center for Innovation’s Blueprint: The Emergence of (R)Tech report, we introduce the divergent retail paths that characterize the success or failure of retailers overcoming legacy systems to enable a culture of innovation. The most successful companies align with the (R)Tech Growth Cycle, building momentum toward change that permeates every level of the organization. Innovation must be a part of a company’s core values, creating a sense of purpose for employees, and enabling the organization to rapidly learn and adapt in an ever-changing environment.
It has become clear that two classes of retail innovation cultures are emerging: the incremental and the transformative. The first characterizes companies that innovate close to their core, focused on addressing improvements in operational performance. The second type of innovation culture identifies, experiments, and executes on transformative business model innovations.
We found for our Building an (R)Tech Culture report that four elements characterize an innovative culture, namely an organization that embraces purpose, leadership, customer empathy, and employees & the workplace.
Now is the time to engage executives from across the industry – from roles as diverse as supply chain, human resources, cyber security, asset protection, sustainability, public affairs, legal, and more – to collectively realize and address the imperative for change.
Telling Our Story
It’s not enough to focus on change from within. The industry is in desperate need of talented and creative engineers, data scientists, and managers. We need all innovators – those already working in retail and those who are new to it, those across the U.S. and those from abroad – to know that retail is a powerful and dynamic industry, where all the best innovations are welcome.
In the next several years, the (R)Tech Center will partner with universities to engage students brimming with the latest ideas. It will partner with VCs, incubators, and accelerators to boost entrepreneurs’ time-to-market. And it will partner with policymakers, in DC and in statehouses across the country, to pave the way for retail’s new path driving the 21st Century economy.
This will be a long journey. We welcome leaders from across the industry to develop their own platforms for change. And we welcome group action on the most critical challenges.
We hope you will join us as we enter the age of (R)Tech.