What It Takes to Innovate: A Conversation with Global Innovation Experts
June 27, 2020
Authors: Valerie Vacente and Fabrizio Rinaldi
Is your organization ready to design innovation programs for growth? How can you create a pipeline of ideas to test and learn before investing big? What emerging technologies are helping to create seamless experiences – especially in the face of COVID-19?
Answers to these and other questions will be addressed in an upcoming webinar, What It Takes to Innovate: Methodologies for Exploration, Design and Igniting the Near Future, part of the Future of Retail event produced by Retail Innovation Week, a spin-off division from research and strategy think-thank, PSFK. LiveArea Director of Strategy Valerie Vacante is a featured speaker along with Fabrizio Rinaldi, Head of Digital Innovation at Versace and Founder of Innovation Waves.
In this preview, Val and Fabrizio offer insights into current trends and challenges impacting shopping experiences in the physical and digital world, and what it takes to innovate.
What’s the secret to innovation in retail? Does it come down to investment exclusively?
Fabrizio: No, it doesn’t come down to investment, although that certainly helps. The truth is that whether it’s retail or any other industry, there’s no secret recipe. Innovation comes down to ideas that work. In retail I’ve found the most successful innovations are the ones that solve problems much like RFID technology has done for logistics, store planning, stock checking, traceability, anti-theft, anti-counterfeiting and so many related activities.
Val: The secret to innovation in retail or any other sector, for that matter, is listening, learning, and watching how people behave; seeing how culture is influencing behaviors and remixing ideas to solve a specific problem.
Has the pandemic accelerated innovation in shopping today?
Val: Absolutely, the pandemic has had a massive impact on accelerating retail innovation. Where retailers may have been on the fence about investing in connected experiences, eCommerce, or emerging technologies, the pandemic has made it a necessity to quickly adapt, connecting physical and digital worlds.
Pre-COVID, the conversation about retail was all about transforming shops into experience destinations, from cooking classes, personal training to pop-up ball pits. But the world has changed, and behaviors have changed. Where stores were touch, feel and play, experiences are now being transformed.
It’s no surprise that 32% of global internet users say they’ll visit stores less frequently. With people wanting to spend less time in stores and retailers looking for alternate revenue streams we will see stores evolve to a store-as-service model. Dark stores are a way for retailers to transform an existing space into a micro fulfillment hub where online orders can be fulfilled or picked up or hybrid store models that also allow customers to interact with brands and products.
What changes and technologies should brands be looking at?
Val: Designers and innovators are taking note and collaborating remotely with virtual reality, augmented reality, and 3D modeling to prototype and react faster. Several technologies and services have been around for years; however, the pandemic has put connected experiences into hyperdrive, and this is for the better. For example, contactless payments were available in the late 1990s in Korea with mass adoption globally, mainly due to Google wallet launching 2011 and Apple Pay in 2014. The U.S. was slower to adopt, but that’s changing. Contactless payments grew by 150% in the U.S. between March 2019 and March 2020.
Interestingly voice assistants have been around for more than five years and there’s no surprise that Alexa and Google Home are on the rise. Globally, voice tech has reached 43% adoption rate, 33% of which is conducted on mobile. In fact, voice shopping is projected to reach $40 billion by 2022, up from $2 billion in 2018.
So, it’s a case of what’s old is new again?
Val: Yes, you could say that. QVC has enticed TV viewers with theatrical retailing since the 1980s. Now Shoppertainment coined by Lazada’s LazLive platform fuses shopping, gamification, entertainment and social experiences that get people gaming, playing and engaging with brands, culture and communities. Recently over 90,000 viewers tuned in to watch one of Shiseido’s LazLive sessions, where the international cosmetics brand successfully generated 40 times GMV uplift compared to a normal hour. A LazLive-exclusive price item sold out in the first 30 minutes. With more people staying home looking for more entertainment, we anticipate seeing more shoppertainment-inspired experiences globally.
Talk about the fusion of fashion and gaming.
Val: Gaming and fashion are meeting up in the metaverse for powered-up fashion plays that people enjoy; Gucci, for instance, partnered with Tennis Clash.
Fortnite has been one to watch for immersive entertainment, music, and fashion experiences. In April, more than 12.3 million concurrent “Fortnite” players participated live in Travis Scott’s “Astronomical” virtual performance, a record, according to Epic Games. With over 350 million registered players, Fortnite recently featured a skins-inspired digital street wear collection created by Scandinavian designer Carlings. A skin is a graphic or audio download that personalizes the appearance of characters in video games. Other examples include:
- Animal Crossing: New Horizons, the fastest-selling Switch game of all time, has been embraced by the fashion community.
- Reference Festival is a virtual fashion show of Animal Crossing avatars strutting their stuff with the latest season’s looks influenced by Loewe, Prada, and GmbH.
- Luxury retailer Net-A-Porter became the first company to monetize virtual items in Animal Crossing working with multiple fashion designers to create avatar skins from their collections. Players can purchase skins to customize their gaming experience in the digital world and purchase clothing to rock their looks in the real world.
What are you seeing today in retail and shopping that most surprises you?
Fabrizio: The mixture of physical and digital experiences. Sometimes they might be just gimmicky solutions elaborated as PR/Marketing stunts, but many other times “Phygital’ — (physical+digital) experiences — are truly giving customers added value.
Val: It has been exciting to see how companies both big and small have adapted during the pandemic. I am still surprised that we haven’t moved faster to evolved connected experiences such as contactless payment, web-based augmented reality, VR eCommerce and repurposing retail spaces and places.
Discuss the concept of “connected consumers” and why it matters both to brands and to customers?
Val: The way consumers get inspired, learn, transact, and share experiences takes place in the physical and digital world. For some people it’s scrolling through Instagram for inspiration, reordering their favorite tea with Alexa, taking an online class, buying groceries online and picking up in store while shipping a gift to a friend and everything in between.
We are the architects who orchestrate the journey for the way people live in the physical and digital world. It is no longer just a digital experience or just a physical experience, rather it is how both worlds fit and work together for the way people live, move, and interact. Successful brands and retailers know this and create experiences that move the way consumers move, remixing culture, insight, and ease.
Fabrizio, talk about “Innovation Waves,” the online publication you started that’s focused on innovation perspectives and people.
Fabrizio: No matter what industry you work in, to really innovate you must take inspiration from the world around you. This is the essence of Innovation Waves. We offer conversations and thoughts aimed at increasing our understanding of complex topics so that we can be inspired and creative.
As a Head of Digital Innovation at Versace, talk about digital transformation in the context of a luxury brand. How is the journey for luxury brands different? What takeaways are universal for all brands as they transform?
Fabrizio: My background is full of experience in creative agencies, that is where you get to innovate the most as you work with different budgets and a variety of brands. I thought I could put to good use some of this background by applying creativity in the way we do things at a brand level (processes, technologies, and people). So, the way I see it, digital transformation is strongly correlated to that: creativity.
But that’s not the only key for innovation to happen, you also need hacking culture in the will of solving challenges; sponsors to believe in your ideas; timing in doing the right thing at the right time; technology to make things happen; relativity to see things with different perspectives; competition to challenge you to push harder; communication to execute efficiently; and, finally, failure and the ability to learn from mistakes.
In your upcoming webinar, you are going to cover methodologies for igniting innovation, but can innovation really be prescriptive?
Val: I don’t think innovation is or can be prescriptive. When it comes to innovation in business it goes beyond just doing something new and interesting with Post-it Notes. It must genuinely create value for people, solve a problem, make life a little easier and joyous. Our latest methodologies are designed to help uncover and solve specific business design challenges through inspiration, insight, co-creation, and consensus building to ignite new products and services in unexpected ways, that align with the overall business strategy, goals, and growth.
Want to know more about what the near future holds? Learn more from Valerie and Fabrizio in the complimentary webinar, What It Takes to Innovate: Methodologies for Exploration, Design and Igniting the Near Future on June 30, 2020.