Retail Executive

NOV/DEC 2017

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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Are You Overthinking Innovation? Why applying innovative thinking through the brilliant basics of retail will render success. J E N N I F E R D I M O T T A President & Owner, DiMotta Consulting, LLC ReStockIt.com was in a Catch-22 situation that could easily impact its survival in the industry. They couldn't profitably offer the standard free shipping over $50, and they couldn't afford not to with all of the competition of- fering this table stake. I challenged the team to consider other options that were also as competitive or better. If we can't competitively offer free shipping by order, can we do so by product? We had a core competency in knowing all of our costs by product, so I leveraged that skill. After analyzing the 200K drop-ship assortment, hinking innovatively to solve core and criti- cal issues can be a more successful endeavor than large-scale innovation today. While in- novative thinking still requires significant courage, confidence, and creativity, a deep understand- ing of the company, the customer, and the clear impact on results can be invaluable to infusing innovation into a challenged and operational-first retail environment. Below, I have provided a few key insights with personal examples, all of which I have gained throughout my 20 years of experience at companies challenged with bud- get pressures and heavy day-to-day operations. KEY INSIGHT 1: INNOVATIVE THINKING CAN LEAD TO DRAMATIC RESULTS WHEN APPLIED TO SIMPLE, YET CRITICAL STRATEGIES. When I led ReStockIt.com's revenue-generation strate- gies in 2008, the office supplies retailer struggled with flattened revenue from the impact of the recession and increasing desire from big-box retailers and Amazon to own category share online. In addition, the retailer had a common challenge of thin margins from a drop-ship business model that led to lean investment in other ar- eas of the business. T Headlines like "Retail Apocalypse" and "Disrupt or Die" ignite the need for retailers to innovate urgently, but the reality is that retailers are not positioned well for significant innovation. With tight budgets and executives focused on immediate impact to fight declining sales, innovation ideas are quickly put on the back burner. Innovation most often is associated to a project that includes high costs, long timelines, significant resource demands, and no guarantee of immediate payoff — bites most retailers cannot swallow. So how do you infuse an attitude for innovation in an environment dominated by the "tyranny of the now"? After analyzing the 200K drop-ship assortment, we found striking results. Over 100K items could profitably be offered with free shipping and accounted for 60% of current revenues. STRATEGY Innovation By J. DiMotta ARE YOU OVERTHINKING INNOVATION? RETAILEXECUTIVE.COM NOVEMBER/DECEMBER 2017 32

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