Why Retail Labs Are Toast
Back in 2014, retail labs were all the rage. It was hard to look around and find a retailer without one. New York Fashion Tech Lab, for example, a collaboration between the Partnership Fund for New York City, Springboard Enterprises and major fashion retailers, offered selected startup mentorships with Ralph Lauren, J.Crew, Kate Spade and the Estée Lauder Co. Fast forward to 2017, and all of these companies bar Estée Lauder are in trouble. They are marred by leadership turmoil, sales and foot traffic declines, store closings and employee layoffs. Their troubles are easy to trace to the lack of innovation. Herein lies the conundrum of the retail lab, forcing upon us the question of innovation as the radical transformation of business models versus incremental improvement in product and services. The former is a strategic mandate; the latter a PR pitch. The most successful retail labs are companies that didn’t exist a decade ago. They swiftly introduced and tested new business models, new distribution and supply management practices, a novel go-to-market strategy and audience-building tactics. Sure, they do not need to deal with the muscle memory of a large, legacy retail organization. But nor they focus on making small tweaks to protect and preserve the retail process that exists in their market. Read more at Advertising Age.
