Innovation

Innovation is what many strive to achieve in their business plans. It is the process of making improvements to something that already exists and can make a business unique and profitable. There are four different types of innovation as defined by Clayton M. Christensen, a Harvard business professor and author of “The Innovator’s Dilemma”.

Types of Innovation:

Sustaining
An innovation that does not affect existing markets.

Evolutionary
An innovation that improves a product in an existing market in ways that customers are expecting. (E.g., fuel injection)

Revolutionary (discontinuous, radical)
An innovation that is unexpected, but nevertheless does not affect existing markets. (E.g., the automobile)

Disruptive
An innovation that creates a new market by applying a different set of values, which ultimately (and unexpectedly) overtakes an existing market.

We are currently experiencing a disruptive innovation within retail stores. The established retail industry has been disrupted by a new set of technologies that offer improved services at lower prices in ways that the old guard did not expect.

These disruptive technologies affecting retail stores fall into three categories: mobile technologies, social networks, and large cloud databases. Smart phones today allow the consumer to price goods and services within a competitor’s store, receive special offers and purchase products over the Internet without going into a store. The consumer also receives expert training and instruction regarding the products operation via video-sharing websites such as You Tube.

Christensen stated that “good firms are usually aware of the innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining innovations (which are needed to compete against current competition).”

He also mentions that start-up firms have different value networks and work to improve the delivery system of their companies to a point when they impact the old line companies.

As retail stores experience disruptive innovation today, big box retailers such as Best Buy are now re-evaluating store sizes, product mix, and employee training in an effort to compete with Amazon and other retailers that have embraced mobile technology.

Currently, there are more than 253 vacant large stores over 10,000 SF available in the metropolitan Phoenix area. We believe this is the tip of the iceberg and many more will develop over the next 7-10 years. REstoreD was created to “Rethink the Box” in retail stores and bring new life to big box retail by exploring innovation and alternative uses for old retail stores.