Innovation in the UK Retail Sector - Nesta

Innovation in the UK Retail Sector
• Desired outcome
• Background
• Evidence
• Analysis (including the impact of the recommendation, the potential benefits arising
from action or risks arising from inaction)
• Conclusions/next steps
Early drafts of these recommendations have benefitted from feedback by the practitioner
member’s of BERR’s Retail Innovation Group and the authors of this report are grateful
for their commentary.
a. Provision of support mechanisms for retail innovation
8.8 The role of Government in providing support mechanisms for retail innovation as in
other sectors should be to encourage risk-taking and innovation, particularly in
challenging business conditions. Such mechanisms can be of several different kinds:
offering information broking, educational and horizon scanning services; advising on
protection of intellectual property linked to innovation; financing or subsidising R&D
through grants or tax credits, or even targeting public procurement to favour innovative
activities. Much of Government’s current activity directly in relation to retail innovation
falls within the first category.
i. Information, education and horizon scanning
8.9 There is widespread informational broking activity provided by different levels of UK
Government potentially to support innovation in retailing. This comes from BERR,
DEFRA, DIUS, the Department for Transport, DCLG, the Regional Development
Agencies and numerous other governmental and non-departmental public bodies
(NDPBs), as well as Local Authorities. Thinking about the future is an area where
Government has already played a part in bringing together interested parties and acting as
a catalyst, or retail ‘knowledge hub’. The retail futures work undertaken by Forum for the
Future and sponsored by Tesco and Unilever might usefully be made available to a wider
audience. Similarly, in relation to specific areas of interest expressed by the sector – such
as retail crime – activities by Government have led to tangible outcomes. For example,
discussions with the Home Office and the Design Council may lead to the rolling out of
the Home Office ‘Design Against Crime’ initiative across service sectors. This may be a
good example of a new way of government working with retailers - as a catalyst for
innovation.
8.10 However, retailers feel that the lack of inter-departmental co-operation within
government (a ‘single voice’) and lack of an integrated agenda can make communication
of these activities confusing and sometime conflicting. Retailers themselves – apart from
perhaps the very largest firms – have limited resources that they can devote to such
conversations. Leading retailers and their trading associations have been active in
supporting many of the Government’s recent initiatives 17 . But even for the largest firms
such requests must be prioritised on the basis of their commercial, or broader social or
environmental, potential. Of course, from the Government’s point of view, evidence that
17 See for example recent Government consultations involving the retail sector:
http://www.brc.org.uk/ConsResp04.asp?iMode=3.
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