Retail's 10-point checklist to foster greater innovation

1. Use data to drive business growth

Data has long been the holy grail but with cost pressures and the challenging economic environment weighing heavy on retail, harnessing data insights effectively can now mark the difference between the industry’s winners and losers. Panda Retail is using data to support dynamic pricing, Temu is analysing and sharing market data with its manufacturers to jump on consumer trends and Woolworths is using customer data to improve its merchandising decisions – just three of many data-driven innovation examples from the 50 global innovators. 

2. Consider automating your supply chain

Amazon and Ocado were early adopters of supply chain automation and have long been ahead of the pack but the report makes it clear that this is the direction of travel for the whole industry. For instance, Aldi has moved to an automated supply chain platform and Coles is now using Ocado’s platform to automate its customer fulfilment centres. Retailers would do well to explore the opportunity to avoid getting left behind. 

3. Get into infrastructure

What goes on behind the scenes at retailers is now just as important, if not more so, than what is visible to consumers. Software development and having the right infrastructure in place are crucial for retailers to future-proof their business. We’ve seen how everyone from TikTok Shop to Tesco is doubling down on their infrastructure. Retailers must invest in their IT infrastructure to ensure any other tech they want to implement can work effectively and is capable of supporting new demands. 

4. Empower staff

Tech can work in harmony with colleagues to make them more engaged, more productive and offer customers a better experience – the profiles of the top 50 are proof of this. We’ve seen how JD Sports has equipped its shopfloor staff with handheld devices to help them better manage stock levels. John Lewis is using robots to ease the burden of heavy lifting on its warehouse workers. Kingfisher has implemented a platform to modernise staff training and REWE Group has leveraged holograms to support staff onboarding. Retailers are even innovating with digital tools to make staff safer such as Holland & Barrett’s investment in its new platform for staff to easily report crimes. 

5. Use tech for good

Especially where sustainability goals are concerned. Be it Nobody’s Child and Tesco implementing digital product passports to drive greater traceability, Patagonia launching its 24-hour repair platform to support the circular economy, or Selfridges committing to a series of tech tie-ups through its ‘Project Earth’ campaign, it is evident that the industry is making use of innovation to make eco ambitions a reality. Tech can support a greater purpose beyond efficiency and profits. 

6. Collaborate for success

Not one of the 50 retailers profiled is working on innovation projects without a trusted partner or industry expert to navigate the way forward. Retailers should consider working with third parties to implement new tech and seize opportunities to save time and resources by removing in-house silos. 

7. Embrace AI

From Ahold Delhaize and Very to Mango to Morrisons, several of the world’s top retailers are betting big on AI to support everything from improved inventory management and CX to optimised marketing campaigns and enhanced consumer loyalty programmes. The use cases in our report show that AI is no longer perceived as hyped-up tech – as it was just a few years ago - but a tool with tangible returns for retail. While the costs of implementation can be off-putting, retailers are advised to test and learn with AI to drive efficiencies and, ultimately, greater profitability.  

AI expert Matt Frank, who is chief AI and innovation officer at Ancoris, echoes the AI opportunity but highlights the importance of retailers getting their data in good order first:

“As we know, retailers are increasingly leveraging AI to enhance operations and improve customer experience. But like many, knowing which use cases to solve for first or how that drives metric-based value for them can be hard to navigate and measure. For some, the barrier to adoption starts even earlier in the journey: data. AI's effectiveness hinges on the quality and accessibility of data. Retailers need to ensure their data infrastructure is scalable, secure, and capable of integrating diverse data sources.

“Governance and management practices must be implemented to maintain data integrity and compliance, too. By investing in a robust data platform, retailers can lay a solid foundation for AI-driven initiatives, enabling them to unlock valuable insights, optimise operations, and deliver personalised customer experiences”, Frank adds.

8. Unlock digitally-enabled stores

The concept of digitally powered stores is nothing new but it is clear that the retailers that are innovating fastest are those making savvy use of tech throughout their bricks-and-mortar networks. We’ve learned how H&M has implemented smart fitting rooms in its Seoul store to enhance the shopping experience, Uniqlo has installed an original video game for visitors to play inside its Oxford Street store, and Pets at Home has implemented interactive screens at its Brentford store to take shopping for pet accessories to the next level.  

9. Explore the robot revolution

While Żabka’s Robbie hot dog maker may seem like a fun CX gimmick, the report shows how retailers across the board are using robots to generate real ROI and making them a core focus of their investment strategies. For instance, Co-op now has the most extensive robot delivery arm in the UK with its Starship bots supporting customer convenience. Carrefour is making headway with the introduction of its advice robot to manage customer and internal queries, while Esselunga is using a robotic store assistant to speed up its store checkout processes. 

10. Maximise video content

Media isn’t dead, it’s just evolving. That’s the clear message to be taken from the strategies among the 50 global innovators. Video content is having a revival and being successfully used by retailers to capture consumer attention and as a result, new sales. Alibaba’s Taobao has invested a whopping ¥10bn into video content curation. Zara is bringing live shopping streams to the West after a successful pilot in China and Zalando has implemented a new tool to push video content to consumers to help them discover new trends.