The retail community constantly grapples with its ability to respond to market trends and customer needs as quickly and efficiently as possible. This same challenge exists in the worlds of business and technology, which means retailers should take a cue from either industry if they want to be more agile in fast-paced markets.
For years, software and consulting firms have leveraged incubator programs to quickly bring innovation to their organizations. Incubators consist of angel investors, economic advisors, and other investment professionals, all working together to jumpstart the success of early-stage startup companies. Typically, startups that participate in these incubator programs have a pretty nice set-up: in exchange for the physical resources, advisory services, and networking opportunities necessary for the company to scale, it agrees to issue some form of equity to the incubator.
Taking this idea a step further, professional consulting firm, Accenture, leverages its own client network to connect promising entrepreneurs to top venture capitalists. Already, the Accenture Ventures program has reached over 5,000 startups from more than 40 countries across the globe.
Similarly, enterprise software giant Salesforce.com offers its Accelerate program, which provides insights and support to companies already using its platform. What’s more interesting, though, is the benefits of Accelerate go both ways: customers can better align themselves with the Salesforce ecosystem to boost workflow efficiency and overall growth, while Salesforce is able to mine customer data to improve the functionality of its platform.
More recently, we’ve seen leaders in both retail and ecommerce leverage similar incubator and brand partnership models, all in a quest to drive agility around customer needs. Chinese technology giant, Alibaba, for example, has been a champion in this space. Through its Tmall initiative, the company leverages consumer data to better understand the evolving needs of its target market. In collaboration with brand partners like Unilever and Proctor & Gamble, Alibaba is then able to identify, design, and produce more relevant, customer-friendly products.
Just last month, Amazon announced its Amazon Accelerator program, an initiative that offers independent retailers marketing support, product reviews, and prominent visibility on the Amazon marketplace. However, unlike the mutual synergy of Alibaba and its brand partners, the Accelerator program is a bit more lopsided. Here’s the catch: participating merchants have to sign an agreement allowing Amazon the right to acquire their respective brand at any time for a fixed price, which usually totals around $10,000, according to The Wall Street Journal. The strategy behind the play is simple: by leveraging its massive market presence, Amazon is able to pinpoint popular brands popular consumers and purchase them outright in a matter of weeks.
Like any other business pursuit, incubator programs and brand partnerships offer favorable pros and challenging cons. But to gauge if these initiatives are right for you or your brand, you’ve got to put in the work. Observe the incubator strategies of companies in different verticals. Research. Take notes. Look for things that click, and toss the ones that don’t. Consider the value incubators or partnerships offer and the potential benefit to you. In fact, retailers running an incubator program can offer a variety of value statements to participants, including executive and advisory leadership, scalability, technology and data infrastructure, sourcing and supply chain partnerships, and physical office or retail space. Conversely, there are a variety of value statements they can derive from their incubation program, like agility in product assortment, technology capability, unique IP, and material and design innovation. Successful retailers should take a pragmatic look at their skills and deficiencies and scale an incubation program accordingly.
Want to learn more ways to bring innovation to your company? Here are four different approaches you can take, starting today.