A new report from Commonwealth Bank showed that only 17 per cent of retailers are innovating in direct response to customer feedback, while just 15 per cent are innovating due to observed changes in customer needs.
Furthermore, only 10 per cent of retailers are seeking to drive innovation to protect against disruptors or changing workforce.
In assessing 15 entrepreneurial behaviours and management capabilities that comprise the CommBank Innovation Index, retailers experienced a modest year-on-year increase in the industry’s index score.
Currently at 29.5, the retail industry sits below the national average across all industries of 32. This time last year, retailers recorded an index score of 26.2 – ahead of the national average of 24.
While retail lags behind other sectors, the report showed that retailers are willing to spend time and capital on uncertain ventures (41 per cent of retailers versus 53 per cent nationally), respond to attractive opportunities (63 per cent versus 74 per cent), and looking for new ways to benefit market and technological changes (72 per cent versus 77 per cent).
The top drivers of innovation in the retail space include productivity (38 per cent), leveraging technology (30 per cent) and pursuing avenues for growth (30 per cent).
Commonwealth Bank National Manager of Retail Jerry Macey said: “Retailers continue to demonstrate cautious optimism, maintaining healthy levels of innovation activity across the industry, albeit that retailers’ innovation index ranking has been outstripped by the average across all industries.
“While more retailers are adopting certain behaviours needed to support innovation, the research suggests that critical drivers of change, such as gathering customer feedback, responding to behavioural shifts, and the reality of disruptive threats, are being ignored across the industry,” Mr Macey said.
