It is a constant and often repeated maxim – the key to Amazon’s success lies in the fact that the online giant behaves more like a tech company than a retailer. This goes much beyond the fact that AWS contributes a tremendous amount of cash to their bottom line. It’s a mindset and a ethos that drives every decision and strategy.
The general consensus for retail success is that traditional retailers need to start adopting a “tech company mindset” to win in today’s market. Shoptalk laid this concept out as embracing the “new normal” and becoming comfortable with the often “uncomfortable” paradigms that come with innovation, rapid change, and even failing.
It has been easier for some retailers, especially the largest ones, to move into this new paradigm than it has for others. Brands like Walmart, Nordstrom, and Target have invested in in-house tech, created incubators, and made strategic acquisitions to “level-up” their tech acumen and their size affords them budgets to do so. For the rest of retail, navigating this shit has been daunting.
Fortunately, you don’t need a huge war chest to start adopting a tech company philosophy – here are three strategies you can start incorporating today to become more innovative tomorrow.
1) Innovate First, Count Money Second – In his first letter to shareholders in 1997, Jeff Bezos laid out a strategy that would drive the company to where it is today. The nascent Amazon would focus on innovation first, and shareholder value second, sacrificing short-term cash for long term return and market share. There’s no magic to this philosophy, but there is tremendous challenge in its execution for most retailers. Whenever possible approach innovation and technology with an eye top long-term success first, short-term returns second.
2) Learn When to Build and When to Buy – A must have for every retailer today is a top-notch in-house tech team that can drive innovation and implement new solutions rapidly. However, being innovative doesn’t mean you should always build everything in-house. Let your in-house team focus on their core competencies and the intricacies of your specific business but don’t expect them to build everything. Empower them to work with best-in-breed technologies and bring new expertise to the table to allow you to leapfrog the timeline on innovation. Remember that in the tech world initiatives are measured in weeks not months or years.
3) Become Comfortable with Failure/Fail Fast – Retailers must become comfortable with the rapid cycle of trial and failure common in the world of tech companies. Of ten new initiatives only one may succeed, of one hundred technologies you try, maybe only one a fit for your company. However, in this market the alternative is bankruptcy, so that one success amid a sea of failure can change the entirety of your business. Retailers must embrace, measure, learn, and grow from failure because failure and innovation go hand-in-hand.