The way big businesses in the retail sector discover and implement innovation is shifting, with the launch of venture teams, accelerator panels and internal ‘incubators’ bringing a start-up mentality to corporate organisations.
Big businesses are embracing this concept of intrapreneurship, an entrepreneurial approach where teams and individuals are driving new venture ideas from within the organisation, according to Peter Sayburn, co-founder of Market Gravity, the proposition design consultancy.
Intrapreneurship or corporate entrepreneurship has been adopted by some of the world’s most successful companies, such as 3M, GE, Intel and Xerox, for several years. It is a great approach to maintain relevance and keep the company agile, customer-centric and innovative. Only recently has this concept become widespread and openly embraced.
Intrapreneurship can be defined as an entrepreneurial activity within a large, established business, usually to address a new market opportunity or develop a new way of doing things, outside the normal scope of activities. Intrapreneurship is also a change of mindset – thinking like an entrepreneur: seeing new opportunities, being completely customer-driven, making the most of limited resources, and above all moving quickly.
Within many big retail organisations there are talented people with brilliant new ideas. The challenge is working out how to realise these opportunities and bring these ideas to life. Large retail companies have been very focused on margin protection and improvements to customer experience and have struggled to embrace new technology. The impact of this can be wide-reaching, including the loss of customers and reduced market share, as new entrants to the sector offer more disruptive, innovative products and services. This is where intrapreneurship comes in.
With the development of new digital technology and business models, more and more people are becoming intrapreneurs. Employees tend to move around more often, so intrapreneurs are adept at landing in a company, making an impact immediately, delivering one or two big initiatives and then moving on to another company.
Retailers are also more willing to collaborate and work in partnership than they used to, recognising that no one company can do everything itself. Organisations often look to acquire start-ups and SMEs to enhance their offering, but you can’t rely on acquisition alone for business growth. Acquisitions can be a great way to bring in new complementary capabilities and technology and can refresh the entrepreneurial spirit and culture within established companies – so a combination of intrapreneurship and acquisition can work well.
We’ve seen some great examples of innovation and intrapreneurship from companies such as John Lewis and Rigby and Peller.
John Lewis created JLAB to incorporate new technology into the business. JLAB selects and incubates start-ups in alignment with the priorities of the executive team, and an integrated part of the John Lewis business. It has led to two ongoing pilots and has transformed its approach to testing concepts in store.
Rigby and Peller – a traditional retailer offering a personalised lingerie service to its customers was quick to recognise the value of new technology and developed and launched an in-store 3D mirror (recent winner at the Corporate Entrepreneur Awards November 2015 in the best new product or service category). It recognised that some women were uncomfortable with underwear fitting processes and developed an innovative digital body scanner, which eliminated the need for a direct encounter with the member of staff if the customer so wished. The mirror takes 140 measurements as customers take a 360 degree turn, ensuring privacy and an accurate fitting.
Speed is key when it comes to intrapreneurship. These dedicated, purposeful teams can cut through the corporate layers that can often slow big companies down. There are other benefits to retail businesses, such as the ability to explore and experiment with new technology before making a big financial commitment, and the impact on the wider workforce – intrapreneurial projects bring new energy and direction to a business.
We are witnessing an increase in the launch of venture teams, or internal ideas incubators, as well as in investment in research and prototype development. Research shows that 30% of retail companies have established dedicated innovation centres – showing an investment in intrapreneurship. This is an encouraging figure but there’s certainly scope for more development within the retail sector.
It’s essential for retail businesses to work collaboratively with experts in this field, listen to creative new ideas from all levels of the company and encourage a culture of change and innovation to facilitate commercial growth.