Converge: Transforming Business at the Intersection of Marketing and Technology by Bob W. Lord & Ray Velez

Author:Bob W. Lord & Ray Velez [Lord, Bob W.]
Language: eng
Format: mobi
Publisher: Wiley
Published: 2013-04-10T14:00:00+00:00

Roads to Innovation

So how can large retailers, with their massive legacy infrastructure and organizational challenges, innovate? It typically won’t come from huge, enterprise-level transformations. Retail is one space where the lab setup has worked well.

Nordstrom’s Innovation Lab, described by its team as a “lean startup inside a Fortune 500 company,” uses human-centered design thinking and Agile and lean processes to rapid prototype potential solutions that might improve the customer experience. The preferred time frame the lab works in is one-week units. A video on the lab’s website depicts the building of an app that aids customers as they buy sunglasses. The features weren’t known to the team going in, so the process began with a user story map that charted out how people buy sunglasses. It quickly became clear that a central function to be included on the app was a side-by-side look at photos of the customer in different glasses to see which one looks best. Using actual shoppers at the Seattle flagship store, the team was able to work out the bugs and sniff out additional functionality in real time.

Walmart’s version of this, known as @WalmartLabs, is based in San Bruno, California, exactly 1,849 miles from Bentonville, Arkansas, as a sign posted there reminds the staff of West Coast techie types. The Silicon Valley lab was built over the past few years as a way to ramp up innovation and is thus far responsible for a new semantically driven search engine called Polaris; Shopycat, a Facebook gifting app; and Goodies, a subscription service for gourmet food. In its San Jose store, Walmart is testing a service that allows shoppers to search for the exact location of a particular item, which could be a real improvement of the shopping experience in a 100,000-square-foot store.

Another interesting model is Starbucks’ Digital Ventures Group, which isn’t a lab per se but has some characteristics of one in that it’s meant to be nimble and entrepreneurial. The group, overseen by the company’s chief digital officer, is responsible for all things digital, from the Web platform, to mobile app development, to the in-house e-commerce platform and business, to its branded Wi-Fi strategy, not to mention social media and loyalty programs. As such it’s a combination of IT, commerce, and marketing that touches both the back-end and the front-end, the physical and the virtual worlds.

The lesson from all of these organizations is to move fast, test and learn, and fail forward. Take winners and try to integrate them into a more holistic experience. It’s not all about epochal organizational shifts, but rather smaller, continuous iterative ones. Take Starbucks’ mobile in-store strategy as an example.

At one point, Starbucks had two mobile apps, one for the store card and another for a store locator. It eventually combined them into a single app that became the Starbucks mobile experience—for a time. Then came Starbucks’ investment in the mobile payments startup Square, and the agreement that Square would provide debit and payment processing in several thousand Starbucks locations. This

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