How Labs went mainstream to drive retail innovation

Come the age of digital, come the age of Labs. A number of retailers and shopping centre companies have hived off their digital initiatives into specialist divisions, often to ensure that a ‘start-up’ mentality can be generated and fostered in order to drive change within the business. In an age of change, property companies have had to adapt fast.

Julie Villet, director of URLab and CSR at Unibail-Rodamco-Westfield says that its strategy comes from the company’s belief that the successful and attractive places of tomorrow will be:

Better Places: better integrated and connected, multifunctional, hybrid and sustainable places, places for experiences and social interactions beyond traditional consumption. – Julie Villet

As such, she says that the company strives to develop ‘Better Places’ and innovation and collaboration with start-ups to support this strategic objective because it requires those companies to invent new products, services and solutions. “Through URLink we proactively source potential partners, initiate projects and collaborations with corporate, start-ups and NGOs and – since its creation in 2015 – URLink has screened over 700 start-ups,” she says.

Karen Harris, managing director of intu’s digital innovation team at the UK/Spanish landlord intu Properties, has seen a similar process formalise over the past couple of years after the establishment of intuDigital five years ago.

“This is the second year of our intu Accelerate programme and over 100 companies applied against certain criteria,” she says. “This year we were more specific and had ‘events with a difference, categorising customer data, virtual shopping assistant, capturing physical audiences digitally and wildcard’ as our themes. In all, 14 were invited to pitch and seven were taken forward to work with us to create a ‘use test’.”

Bo in retail innovation Labs

© intu

Harris says that one of the major changes between how the innovation arm – which has retained its own entity – works in relation to the traditional shopping centre approach is that ideas are delivered quickly and on pragmatic budgets, so that they can be tested live, enabling the team to then work out what was successful, what was not and then go back to trial with a refined product or service.

That speed of process and delivery involved collaboration across teams and has really helped deliver a culture shift within the business as a whole – Karen Harris

Harris insists that maintaining the digital arm as its own division has also been crucial to foster and develop ideas.

In terms of determining what Hammerson invests in, Sophie Ross, integration director at UK REIT Hammerson, says that the company starts by identifying customer needs and wants and then goes in search of the technology and researches potential partners who can implement them. However, she stresses that initial delivery is done on – by technology standards – low budgets of £20,000-£30,000, enabling Hammerson to test and appraise quickly.

“We then appraise, iterate and keep going until we get something we’re happy with,” says Ross, who, like Harris, recalls some initial resistance to putting things out in a relatively untried status direct to the consumer, because it was against the initial intuition to trial things “that are not good enough”. But she says the system is now well established and accepted.

It means that not every initiative operates as expected. When the Style Seeker app was separate from the main Hammerson Plus app it did not take off as expected. “We got to grips with it, integrated them and saw a much better result,” says Ross.

This is such a fast-moving field that it’s inevitable that ideas can evolve or change and it’s why we adopt the agile approach for digital. – Sophie Ross

Villet says that to decide how to proceed with certain ideas requires straightforward decision making. She adds: “First, does it nourish the development of our Better Places ambition? Second, is it scalable? Third, what is the expected impact? Operational teams are also involved to ensure we create the best possible conditions for the proof of concept.”

So far, URLab has initiated 23 collaboration projects with start-ups or corporate partners since the creation of UR Link, with start-ups such as Sous les Fraises developing vertical farms on the roofs of its shopping centres; Merito providing a recruitment solution to the retailers present in its malls; and Neatyy building a marketplace of personal shoppers for Unibail-Rodamco-Westfield visitors, as examples.

We offer our partners the opportunity to test a product/solution in one of our shopping centre for a duration of four months and hence to benefit from the contact with our dozens of thousands of daily visitors,” she says. “The start-up is then accompanied by our operational teams, who dedicate up to 20% of their working time and are constantly in contact with the URLink team members. Close follow up is key during this proof of concept phase to monitor performance and thus quickly address future deployment at the end of the proof of concept.”

innovation artificial intelligence

© Getty Image

For me the two really exciting areas of innovation are artificial intelligence and voice – Sophie Ross

“For artificial intelligence (AI) we introduced Style Seeker and that has given us the opportunity to develop and learn what people are coming for and how they use the service. There are lots of applications for AI and although it’s at early stages, I think we’ll see it introduced to our service desks in the next six to nine months. For voice we also see the potential adoption for customer service, for example as wayfinding for those partially sighted.”

Harris adds: “Having our own in-house developers and a start-up mentality enables us to be agile and flexible, to push initiatives through ourselves and to work on interesting things. You never know exactly what will gain traction but our approach means we can constantly introduce, test and improve ideas for our customers and retailers.”

About Author

Mark Faithfull

Mark Faithfull is Editor of the MAPIC Preview and News Magazines, as well as Editor of online publication and analysis specialist Retail Property Analyst.

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