“Is Macy’s innovative? I would suggest yes, in our DNA,” Macy’s executive vice president Mike Robinson said.
Macy’s in the 1860s was the first retailer to get a liquor license, had a hand in developing the baked potato, and in 1998, became one of the first department stores operating e-commerce, he said. Yet into the new Millennium, “We weren’t innovating as quickly as we could have. We found ourselves falling behind.”
Macy’s had a failed and costly experiment with a social polling widget to “take the great experiences in social media and bring them into the shopping experience” and ultimately took a different approach by forming in 2014 the Macy’s Idea Lab to tap “the innate creativity of employees,” Robinson said.
Explaining how the Idea Lab works, Robinson, who works largely in the digital space and customer experience, said each month the retailer sends out a challenge to employees to solve an issue in the customer journey, such as making self checkout easy and appealing, or some other way to remove “friction” from the shopping experience. He suggested the Idea Lab is more of a process, rather than a place, where solutions from employees are voted on through software polling. The most popular ideas are vetted through “a shark tank” process, where executives then judge the top three ideas and one gets approved.
The concept then advances to Macy’s technology offices in San Francisco, where the employee who had the idea gets a small team that could include programmers, marketers, software developers, as well as outside tech start-ups, to work with for two weeks to come up with a prototype. If management likes the prototype, it goes into production and then a testing phase. “We have run 50 of these over the last 50 months.” Some reach the production phase and some even become “smart pilots.”
“Every single one of these experiences taught us something we didn’t know — about creativity, about working with start-up companies, about how our own teams operate,” Robinson said.
There have been other positive byproducts of the lab including “a blurring of lines across functions” where engineers, product managers, creative personnel and others discovered they could be good at tasks outside their own disciplines. And Macy’s grew “an appetite for partnering with big and small technology companies” and began getting “stealth start-ups knocking on our doors, saying we understand that you are trying to do things we didn’t think big retailers would do,” Robinson said.
“Three years ago we were doing about three experiments a year. Now we are doing a couple of thousand a year. This has made us incredibly more sensitive to what the customer is willing to tell us and we are looking for feedback constantly.”
He said Macy’s is “doubling down” to innovate its mobile business, the retailer’s fastest-growing channel, and experimenting with how mobile can integrate with self-checkout, enhance its search function and could provide voice-activated personal assistance, which will be in beta form later this year.
On the brick-and-mortar side, Robinson said the Macy’s in Woodbridge, N.J., has turned into a laboratory for trying different things with the assortment, layout and technology.
“Innovation comes in all shapes and sizes, but it’s important that we as leaders have to look for it,” he said. “I am a big believer that every single member in my organization and your organization has a genius idea in them. The fact is, everybody has a creative moment. Giving a voice to it is incredibly important. You just have to figure how to get it out.”