Innovation in the UK Retail Sector - Nesta
Innovation in the UK Retail Sector - Nesta
Innovation in the UK Retail Sector - Nesta
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Vignette 4.1: Hotel Chocolat: multi-channel format<br />
Context: Offer-related <strong>in</strong>novation<br />
<strong>Innovation</strong> <strong>in</strong> <strong>the</strong> <strong>UK</strong> <strong>Retail</strong> <strong>Sector</strong><br />
Example: “British chocolate has been a joke for quite a while. We are at <strong>the</strong> forefront of its resurgence.” (Angus Thirwell, cofounder).<br />
Hotel Chocolat has exploited a vacant niche with<strong>in</strong> <strong>UK</strong> retail<strong>in</strong>g for au<strong>the</strong>ntic, high quality, British-made chocolate.<br />
Hotel Chocolat was founded as a catalogue bus<strong>in</strong>ess <strong>in</strong> 1993. Its first store did not open until 2004. It now operates a corporate<br />
gifts service and a tast<strong>in</strong>g club with 100,000 members, <strong>in</strong> addition to its web site and 22 outlets <strong>in</strong> <strong>the</strong> <strong>UK</strong>., which generate £39mn<br />
<strong>in</strong> sales. It won Emerg<strong>in</strong>g <strong>Retail</strong>er of <strong>the</strong> Year Award at <strong>the</strong> <strong>Retail</strong> Week Awards <strong>in</strong> 2007 as well as be<strong>in</strong>g nom<strong>in</strong>ated as a<br />
CoolBrand and plans <strong>in</strong>ternational growth. It is already available onl<strong>in</strong>e <strong>in</strong> New York, Boston, Atlanta, San Francisco and<br />
Chicago.<br />
Vignette 4.2: Migros – susta<strong>in</strong>able brands<br />
Context: Brand <strong>in</strong>novation<br />
Example: Migros is <strong>the</strong> largest Swiss retailer with 2m co-operative members, 590 stores, and sales of CHF 21 billion. Over<br />
several years <strong>the</strong> retailer has agreed with its suppliers a set of ethical standards manifested through <strong>the</strong> launch of its range of own<br />
labels under <strong>the</strong> umbrella brand ‘Engagement’. Each <strong>in</strong>dividual label represents a kite mark for a particular <strong>in</strong>itiative of Migros, for<br />
example <strong>the</strong> elim<strong>in</strong>ation of child labour, better liv<strong>in</strong>g conditions and <strong>the</strong> conservation of tropical forests. These <strong>in</strong>itiatives predate<br />
much <strong>UK</strong> activity. Examples of such labels are:<br />
– BIO is for organic products manufactured without <strong>the</strong> use of chemical-syn<strong>the</strong>tic pesticides and fertilizers,<br />
– Max Havelaar (Maximal Fairness) is for products comply<strong>in</strong>g with our fair trade guidel<strong>in</strong>es,<br />
– 7-po<strong>in</strong>t meat guarantee label is for healthy meat from healthy animals,<br />
– IP-SUISSE guarantees that <strong>the</strong> bread, flour, potatoes and rapeseed oil are produced <strong>in</strong> Switzerland under environmentally<br />
friendly conditions,<br />
– Mar<strong>in</strong>e Stewardship Council guarantees that <strong>the</strong> fish is from susta<strong>in</strong>able fish<strong>in</strong>g grounds,<br />
– Forest Stewardship Council for timber from forests that are managed <strong>in</strong> an environmentally friendly and socially acceptable<br />
way<br />
– ECO is guarantee<strong>in</strong>g environmentally friendly production of clo<strong>the</strong>s, home textiles and shoes,<br />
– Bio Cotton for organically grown cotton<br />
Accord<strong>in</strong>g to Claude Hauser <strong>the</strong> Chairman of Migros alongside technology and product extensions <strong>in</strong>novation <strong>in</strong> Migros is about<br />
pr<strong>in</strong>ciples. Although <strong>the</strong> company acknowledges that generally grocery markets are quite price sensitive <strong>the</strong>re is also an <strong>in</strong>creas<strong>in</strong>g<br />
sensitivity among shoppers about ethical, environmental, and health issues underp<strong>in</strong>n<strong>in</strong>g <strong>the</strong> grow<strong>in</strong>g need for <strong>the</strong> Engagement<br />
brands (Hristov 2004; Migros 2006).<br />
Vignette 4.3: <strong>Retail</strong> Cl<strong>in</strong>ics<br />
Context: Co-<strong>in</strong>novation <strong>in</strong> new services<br />
Examples: Recent example of new service <strong>in</strong>troductions <strong>in</strong> US retail<strong>in</strong>g are <strong>the</strong> trials <strong>in</strong>-store retail cl<strong>in</strong>ics. In this case more than<br />
a dozen cl<strong>in</strong>ic operators <strong>in</strong> co-operation with retailers such as CVS, Wal-Mart, Target, Walgreens and Kerr Drug are pilot<strong>in</strong>g <strong>the</strong><br />
idea <strong>in</strong>-store cl<strong>in</strong>ics which will be provid<strong>in</strong>g convenient but limited service at a low cost offer<strong>in</strong>g basic procedures such as<br />
<strong>in</strong>oculations and treat<strong>in</strong>g common ailments such as strep throat, ear <strong>in</strong>fections and allergies.<br />
These walk-<strong>in</strong> cl<strong>in</strong>ics are seen as alternative to <strong>the</strong> more expensive doctors’ surgeries and emergency rooms, although this has<br />
provoked serious backlash from family doctors who call for tighter regulation of such practices. In <strong>the</strong> <strong>UK</strong> <strong>in</strong> 1999 Boots trialled<br />
dental cl<strong>in</strong>ics <strong>in</strong> some of <strong>the</strong>ir high street stores after <strong>the</strong> acquisition of Dental Body Corporate and Wilson's Dentistry Limited,<br />
<strong>the</strong> <strong>in</strong>itiative was later abandoned. The company however cont<strong>in</strong>ues to offer flu jabs and free prescription collection.<br />
(www.usatoday.com; www.ft.com; www. bbc.co.uk, 21.10.2007)<br />
Vignette 4.4: Wal-Mart – limits to format <strong>in</strong>novation<br />
Context: <strong>Retail</strong> format <strong>in</strong>novation<br />
Example: Hav<strong>in</strong>g created <strong>the</strong> Supercenter years ago, Wal-Mart has cont<strong>in</strong>ued to <strong>in</strong>crementally evolve <strong>the</strong> concept. Over time it<br />
has deliberately pushed <strong>the</strong> envelope creat<strong>in</strong>g new more productive versions of <strong>the</strong> format roughly 20 000 sq ft or more larger<br />
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