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January 19, 2016 IT News , , ,

Faced with tech changes, retailers eye the need for innovation

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Since retailers – even major ones – tend not to spend money on research and development, many need guidance to keep up with the changes technology is bringing to the industry.

What need, according to IBM, is Innovation as a Service.

Of course, IT and business leaders have heard of Software program as a Service and Infrastructure as a Service. But Innovation as a Service?

The concept underlies a partnership with technology enterprises intending to help retailers figure out what they need to connect brick-and-mortar stores with online sales — and what technology can drive them into the future of retail.

Innovation as a Service goes beyond the simple use of technology: it’s more about how to change businesses’ thinking about how they’ll sell products five, 10 or 15 years down the road.

“Retail is an industry that doesn’t have R&D budgets” said Stephen Laughlin, a vice president and general manager at IBM. “We’re more reactive. Everywhere else, there’s a line item about R&D. What will happen next? Brick and click are going to work together, yet how are they going to work together?

“It’s an arms race,” he said. “It’s a never-ending effort. You have to keep advancing and investing to stay ahead of your competition.”

Retailers, whether they’re niche stores or global powerhouses, will need help staying ahead, or at least even, with the technology changes that lie ahead.

That’s where IBM and rivals like Accenture and Capgemini Worldwide hope to make a mark.

“Because of all of these challenges in retail, we’re starting to see this appetite for rapid experimentation,” said Laughlin. “Retailers are starting to see they need to be more agile — more like a startup. Innovation as a Service gives them a small team helping them put in place that whole process of working with ideas and evaluating the technology.”

Laughlin is speaking this week at the National Retail Federation’s Big Show conference in New York.

IBM said it already has Innovation-as-a-Service customers, but declined to specify who they are or how many customers they have.

“This is brand new [for retail]. It started for us in banking,” said Laughlin. “We’ve got creative and strategy people. We can participate in ideation or they might have the ideas but they want a process to evaluate tech solutions, prototype them in warehouses or prototype them online. It just depends on who they’re working with and what they want to do.”

Greg Girard, an analyst with IDC, said the idea of turning to a company like IBM to help a business determine technology needs isn’t a new concept. The issue now is that retailers are realizing how much work is ahead and how much help they might need.

Many industries have sought innovation partners. Retailers have just done it far less.

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