Five insider tips on how retailers can be agile technology innovators
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Five insider tips on how retailers can be agile technology innovators

Jim Mortleman – March 2017
Nick Lansley, the former R&D chief at, distils his insight from more than a decade leading technology and innovation at the supermarket giant’s ecommerce group into a handful of powerful lessons.

How do you go about transforming a 70-year-old traditional retailer into an agile technology innovator? Few people know better than ecommerce pioneer Nick Lansley, the former leader of R&D at and ex-head of open innovation at the supermarket giant’s Tesco Labs.
Paul Richardson
Nick Lansley

Now running his own innovation consultancy (Nick Lansley’s Innovation Lab) he shares his passion for bringing pragmatic innovation techniques and ways of working to businesses starting their own innovation teams or struggling to get traction with innovation projects.  At the recent IoT Tech Expo conference, he boiled down the key lessons he’s learned into the ‘five Cs’ of online retail:

1.    Customer co-creation
Listening to end-customers’ suggestions, needs and frustrations can be enormously beneficial when it comes to innovation. While most organizations survey customers regularly, many shy away from involving them more directly in the creation of new products, services or experiences. “You should be getting ideas in front of lots of customers as early in the product development cycle as possible,” says Lansley. “The reason many companies don’t is the fear that people will blab their secrets to competitors. The trouble with that attitude is that by the time you go to market, customers’ needs might well have changed – and if you didn’t involve the people who’ll be consuming that product or service, you won’t know until it goes live. At Tesco Labs, for instance, we gave customers early prototypes of iPhone apps and, in turn, they gave us really helpful feedback.” He adds that co-creation projects were most successful when customers “felt part of the journey,” and their input gave them tangible benefits — in the case of Tesco, with thousands of customer reward points.

2.    Collaborate
To be able to source and develop innovative ideas, Lansley says it is vital to facilitate open collaboration across the entire organization. While Tesco has around 5,000 people in its head office, there are more than 200,000 on its shop floors and in distribution centers. “We clearly weren’t going to find answers in our ivory tower. The key was giving all our people the ability to collaborate freely across traditional hierarchies and teams,” he says. Tesco introduced collaboration tools Yammer and Trello for sharing notes and updates across the entire business. “It was a spectacular success. Colleagues on the shop floor, in IT, marketing, commercial – everywhere –  were suddenly all talking to each other and answering each other’s questions. When you have that level of collaboration, it throws up fantastic ideas and opportunities.”

3.    Create CX
Products, services, events and environments should be designed around the quality of the customer experience, not simply around form or functionality, says Lansley. That might involve online, in-store or any other type of ‘experience.’ “For instance, at Tesco we carried out an experiment in one of our large Tesco Extra stores where every department was allowed to physically reshape their area in whichever way they liked. The transformation in customer experience was incredible. The coffee shop was designed like a university dormitory; the clothing section was made over with pop music and TV screens; the beer, wine and spirits section was transformed with wood panels and lighting into a mock cellar. And all the aisles were widened. The overall effect was that customers were far more relaxed – and that made them buy more,” says Lansley. Equally, bringing that same kind of imaginative design into the creation of online and other technology-enabled experiences is another good way to relax and delight customers, increase customer engagement and boost sales. As he says, “Think about what the best customer experience looks like in your imagination, then try to make it real.”

4.     Culture
Too many firms try to innovate by hand-picking an innovation team that is then allowed to go off and do its own thing. “But most innovation teams are simply boys with toys. They buy themselves MacBook Pros and sit in a side office doing very little except annoying their colleagues outside. One team I met seemed to spend most of their time playing with a drone they’d bought,” says Lansley. This is completely the wrong approach to innovation. “The best innovation teams don’t innovate themselves – they facilitate,” he points out. That means nurturing an environment that’s buzzing with ideas and experimentation, where everybody can contribute. “The role of innovation leaders should be to liaise with bosses and ensure people are given space and time to work on their own innovative projects. At Tesco we ran regular hackathons, for example, as well as our TJAM events, where start-ups were invited in to pitch ideas to Tesco executives in a speed-dating format.” And it’s not always best to tell managers in advance what you’re up to, he argues.  “Sometimes in innovation you get it, but the bosses don’t. In those cases I tended to heed the advice of legendary programmer Grace Hopper, who believed that when it comes to innovation ‘it is easier to ask forgiveness than get permission.’ Sometimes it’s better not to show the boss until you have a working demo.”

5.    Community
Once you have a culture that’s conducive to innovation and agility, you should aim to open things up to a wider ecosystem of partners. No single organization can expect to have all the best ideas. “At Tesco we built an API for our ecommerce system to allow third parties to register, agree to some terms and conditions, and then write apps and services that hooked into the system. We rewarded them using an affiliate program: £5 for every customer that came to us via their app.” You should also look at proactively integrating third-party services that could add new value, functionality and/or convenience for your customers, he says. “Tesco was one of the first to integrate, for example, which acts as a kind of glue between different online services, systems, devices and information. It allows our online shopping customers to set up ‘if this... then that’ rules such as ‘if the temperature is higher than 20ºC, then add ice cream to my basket.’ There’s no programming required – they just set up the rules via an onscreen wizard — it makes customers feel in control.”

• Nick Lansley was speaking at IoT Tech Expo in London
First published March 2017
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