target’s e-commerce prototypes and innovation keys in the us
TRANSCRIPT
Innovation in Retail
How Retailers are changing the way they do business
Edward Chenard
Innovation Leader at Target
Built one of the first Big Data systems in Retail
Built Data Science teams
Built teams that have scaled to over $100MM in 2 years
Twitter: echenard
What is Innovation
“If I had asked people what they wanted,they would have said faster horses.”
- Henry Ford
• Innovation is about arriving at a place we have never been before by doing something we have never done before
• Innovation is about seeing the world through the eyes of your customer
• It is about creating value by challenging the culture and “how we do things”
The Heart of Innovation is RevolutionIt is about changing the world
“Understand this, you’re not competing with another company, you’re really competing for
time and attention.”
Innovation is a series of Evolutions
Data Centric
Silos
Specialist
Linking
Linear
Customer Centric
Collaborative
Big Picture Practitioners
Sharing
Frictionless
From To
Innovation is about arriving at a place we have never been before by doingsomething we have never done before
How to Approach Innovation
Innovation relies on trust and commitment. Reward the Brave
What do Executives want from Innovation?
New products & services for existing cus-tomers
New proudcts & services to expand new customers
New to world products
Cost reductions to existing products & services
Minor changes to existing products & services
0 20 40 60 80 100
Priorities
Priorities
www.competingvalues.com
What Stops Them from Having Innovation?
Lengthy Development Times
Lack of Coordination
Risk-Averse Culture
Limited Customer Insight
Poor Idea Selection
Inadequate Measurement Tools
Dearth of Ideas
Marketing or Communication Failure
0 5 10 15 20 25 30 35
32
28
26
25
21
21
18
18
Barriers to Innovation
Inhibitors to Innovation
Personal Block Problem Solving Blocks
Organizational Blocks
• Conformity • Following familiar
habits• Enthusiasm without
thinking• Lack of Imagination• Self discipline
• Focusing on tools not problems• Lack of discipline• Rigidity• Poorly thought out approaches• Poor language skills
• Forcing group think• Working in isolation• Not enough collaboration
• Policies over solutions
• Too much belief in experts
Innovation is hard, it is never going to get easy. Understand the pitfalls along the path of building great products
For innovation to work, you need to go from idea to scaled product in a way that allows you to reach your customers first with the best value
Relevance
Trust
Scaling
The Four Focus Areas of Innovation
Culture Changing
New Technologies
Partnerships
Learning
Innovation
Conversion
Industrial era management tactics don’t work with innovation
Innovation systems needs to not only be adaptive, but often complex systems that are open
Ideation
Production
Planning
• Crazy should be normal
• Focus on combining ideas to solves problems
• What is the future, know it and plan for it
• Think long term but plan for small steps
• Build to learn• Focus on stability
Being Unique has no value in itself, innovation much create
value for the customer
Goal: Always build with the goal of scaling, without scaling you are just funding someone’s hobby
Scaling
Think Different, Be Different
Getting Started
Defining what you are
doing
Creating a cultural
framework for the team
Information that helps you drive decision
The experience of the customer
Merging data and UX
Data AlgorithmsProcesses UXStrategy
Today, innovation is a blending of many different areas of the business to come up with new ways of engaging customers through repeatable systems
Innovation systems needs to not only be adaptive, but are often complex systems that are open. These are the models that survive, the more closed the model, the less use it will have by customers.
How to Build a Tem
Innovation is a team sport, working in isolation is deadly
“The best way to kill innovation is to let the boss speak first”
New MethodsMerging Many Methods to Gain an Advantage
Innovation doesn’t fit in a single methodology
One Method No Longer Works • Many companies only employ
one method or poorly combine two. New methods require combining many methods to drive out real innovation.
• Often Agile is used as a method for speed but often lacks big vision.
• Design thinking often brings great user experience but lacks speed.
• Product can bring great business strategy but can lack user experience.
UX
Agile
Product Management
Solutionist Approach
Design Fast
Strategic Design
New Model
Doing Product Management the Right Way
Learn from manufacturing product management
One Method No Longer Works • Agile product management
just isn’t enough to get the job done
• Product managers need to be the small business owners of their own products
• Long view with quick movements is the new normal
Product Management
Agile gives you speed
Agile works best in the development space
Agile, a method with its place • Agile helps to keep your
development team moving quickly
• Agile is not a method for strategy or business management
• Agile alone is not innovation
Agile
UX, Where Design and User Experience Bring a Human Touch to Innovation
Numbers alone don’t create innovation
User Experience is the special sauce • User Design (UX) is not design, it is
the action that informs design
• It must be cross functional or else it just becomes “something those design guys do”
• Design think helps the team balance the solutionist approach that often is rampant with technology innovation teams
• People are ruled by emotions, not logic, build with that in mind
Design Thinking (UX)
When people think of innovation teams, they often think of people like these
Most innovation team members look like these
Studies have shown that people over 50 produce more high value products than the under 34 crowd.
Over 45 have better financial understanding
Over 35 have the experience needed to work on multiple work streams at once
Key Players Your Team Needs
Idea Creation Implementation
ChoicesChangeCulture
ActionableScalableRepeatable
ConnectorKeeps the team engaged with other teams
Customer ChampionKeeps the team focused on the customer’s needs
CreatorThe magic maker, creates ideas
RevolutionaryBelieves in change, driven to change the world
TroubleshooterThe problem solver, gets the team through challenges
Enlist Deep and Diverse Domain Experts
Not all Doman Experts work the same:
Brokers: A person or group that connects different clusters together.
Closure: Building trust within a team cluster, the closer you are the stronger the trust.
Betweeners: Critical linking member between other teams that can help the innovation team
How to Sustain it All
Just because it works for Google, doesn’t mean it will work for you
• Algorithms should not replace
strategic judgment.
• Data can give a false sense of
direction and security.
• Big data and data science are
not the same.
Technical Pitfalls Companies Often Fall Into
Building Your Roadmap
Can we win?
Is it worth doing?
Is it real?
Today’s assumptions don’t work for tomorrow’s solutions
One Roadmap is Not enough
Ideas and Strategy RoadmapFocus on ideas and how those ideas will then help the
customer and business. No limits on ideas, use strategy planning to help narrow down which ideas to
follow
Detailed RoadmapResearch, production and scaling roadmap. A roadmap to build these ideas to make them a
working product that can be used by customers
Collaboration RoadmapWho outside of your team do you need to work with. No idea grows in a single team, have a roadmap for
collaboration across the org or ecosystem
Innovation RoadmapHave a roadmap to delivery and scaling
FY 14 Q4Nov- Jan
FY 15 Q1Feb - Apr
FY 15 Q2May - Jul
FY 15 Q3Aug - Oct
FY 15 Q4Nov - Jan
Algorithm and Metric Monitoring
Research
Delivery
Operations
Social Interaction
Batch Recommender
Real-time Recc
Search Data
Revenue Attribution
Pipeline for Rev Display
Store Display
POC
Store Display
POCReal-time recc
based on search terms
Recommendations utilizing social data
Desktop/Mobile/Tablet specific
recommendations
Real-time Inference
Customer Experience Framing
Innovation and Customer Emotional
Engagement
Source: XPLANE and Business Model Generation by Alexander Osterwalder
What do they
THINK & FEEL & FEAR?what really counts
major preoccupations worries & aspirations
What do they
SEE?environment
friendscolleagues
what work offers
What do they
SAY & DO?attitude in public
appearancebehavior towards others
What do they
HEAR?boss
colleaguesinfluencers
friends
PAINfears | frustrations | obstacles
GAINwants/needs | measures of success | obstacles
How can you reinvent the customer’s experience?
Connect the dots across multiple touch points
Think of the memories you want to evoke, then design for those memories
NOT what messages to communicate or what media should carry them
Remember, innovation is about the customer, not the technology
Thank You