Exploring retail innovation management: Perceptions and practices in Swedish retail organizations

Abstract: Innovation plays an important role in organization survival and longevity. This is especially true in the retail industry; there is a growing acknowledgment of the role of innovation in retail practice, as maintaining the status quo might prove insufficient, especially for traditional retailers, in addressing the enormous challenges they are facing driven by technological developments and evolving consumption patterns. However, innovation management in the domain of retail trade is relatively poorly understood in academic research, and there are knowledge gaps regarding innovation management in retail that need to be addressed. Therefore, given the context of the problem, the overall purpose of this licentiate thesis is to contribute to the understanding of innovation management in retailing, a relevant concern both in academia and practice. More specifically, the thesis explores how the concept of innovation is perceived in Swedish retail organizations and how innovation practices are managed in these organizations. The Swedish retail industry is a dynamic and interesting context for research, especially with the changes (and challenges) it is currently experiencing.In order to address the research topic of retail innovation management, a frame of reference needs to be based in the integration of the research streams of innovation management and retailing—two broad research streams that have been overlapped in certain publications, but the integration of which is not yet an established research domain on its own. Concepts of a strategic and integrated approach to innovation management (including organizational climate), an alternative innovation perspective such as “design thinking”, and foundational literature on retail innovation are all part of the theoretical basis of the research.The thesis approaches innovation management at the level of the retail firm; in particular, perceptions and practices from a corporate management perspective. Using an exploratory, mixed methods approach, three studies were conducted (a pre-study, a qualitative interview study, and a quantitative survey study) and involved four major Swedish retail organizations of varying characteristics.The research concludes that retail organizations do innovate in an opportunistic, incremental way, with fragmented practices throughout the organization, and without an overall strategic or systematic approach to it. The innovation process—and management of innovation, in general—seems to be handled in a disjointed way in the studied retail organizations in the empirical study. However, it was evident that retailers certainly engage in innovative practices, despite not always labeling development- related activities as "innovation" per se. Moreover, certain dimensions of an innovative climate exist (to some degree) in the retail organizations.However, in a period of industry disruption, perhaps an innovative climate, and a haphazard approach to the innovation process, could prove insufficient especially if an organization is lacking resources and structures that could potentially bring about innovations that go beyond incremental, operational changes. It could also be said that perhaps it is time for innovation to have a more prominent role in retail strategy and management, especially since this research shows that certain prerequisites to innovation do exist in retail organizations. Moreover, retail inherently has the opportunity of being in close contact with consumers, as well as being the hub of a network of many suppliers. A deeper understanding of consumer needs and a better use of the diverse supplier network for more collaborative and open innovation, coupled with an overall retail strategy that is more strongly rooted in innovation, could be a potential way forward.