Under pressure to meet changing consumer demands, several big brands have opened ‘labs’
Traditional retailers are riding the tech wave as they look for new ways to drive traffic and sales across multiple platforms, and to make it easier for consumers to shop how they want and when they want.
Big name retailers like Nordstrom, which will open its first Canadian stores next year, have introduced internal innovation labs that develop and test new technologies to enhance the overall customer experience.
Nordstrom is exploring and adopting new practices that add to its already high level of customer service, a brand attribute that for decades has set it apart from the competition (while many Canadian retailers seem to struggle in that area).
“Technology is really accelerating the pace of change in retail and more importantly how the customer wants to be served,” Colin Johnson, business public relations director at Nordstrom, tells Marketing.
“[Our] Innovation Lab is about helping us learn more on how to better serve our customers,” he says. “If we don’t have that we’re just another store.”
Having a dedicated space and team allows the retailer to “quickly vet and look into different initiatives or capabilities we might want to scale up.”
Though Johnson won’t provide specific examples of projects that have come from the Innovation Lab, he does say the team worked with other internal departments to rethink the layout of Nordstrom’s beauty department. This new shopping experience, he says, is easier to navigate and explore. It’s “less defined by brands and more defined by what feels like a natural customer experience,” he says of the layout that Nordstrom plans to introduce to new locations.
Other retailers are experimenting with internal innovation labs, including…
Late last year the office supplies provider opened what it calls the Velocity Lab in Cambridge, Mass. to help accelerate mobile and online consumer solutions. The Velocity Lab can house up to 75 associates and features an open floor plan as a collaboration space. Staples also taps some of the brightest minds from top universities in the area to collaborate on research and innovation projects. The Velocity Lab has already spearheaded the launch of digital initiatives, including a mobile-only flash sales promotion during last year’s Black Friday shopping weekend.
The retailer recently moved a team of five employees into Communitech—a digital incubator in Waterloo, Ont. funded partially by the Ontario government—to experiment with new digital products and experiences for both its online properties and retail locations. The team experiments with products such as digital kiosks, mobile payments and apps that could enhance Canadian Tire’s brick-and-mortar experience.
Last December the home improvement retailer purchased BlackLocus, an Austin, Tex.-based startup that “builds technology that helps retailers make data-driven pricing decisions.” This led to the creation of the standalone Home Depot Innovation Lab. According to its site, the Lab focuses on research, analytics and engineering.
American Eagle Outfitters
The clothing retailer opened its first corporate office in San Francisco last July that it said functions as a “progressive technology centre” that employs engineers, designers and digital marketing teams to focus on personalized shopping experiences across all purchasing channels. The 10,000-square-foot office is hiring as many as 100 employees over the next year.
Since opening the doors on its California-based @Walmartlabs in 2011, the big box retailer has snapped up a number of tech startups, including Kosmix, Inkiru, OneOps, Tasty Labs and others. Though the retailer has always been data driven, it has widened its focus to include social and mobile data tracking. In the last few years, @Walmartlabs has created a shopping app called Shoppycat and unveiled a new search engine that powers the retailer’s website and mobile site.
This story originally appeared in the Nov. 11 issue of Marketing, where you can also read our annual Salary Benchmarks survey, our investigation into automated ad buying and much more. The Nov. 11 issue is available on newsstands, to subscribers and to iPad users via the Apple Newsstand.