Sephora, Kohl’s and Estée Lauder were among the first to kick off the retail lab movement in 2014, convening teams that included a wide swath of employees ranging from creatives to data scientists. Today, several major companies have followed suit, including Yoox Net-a-Porter Group, Neiman Marcus and Kering. Each innovation group varies widely in scale and function: Neiman Marcus only has one dedicated full-time employee on its innovation team, while YNAP has 500 working at its new Tech Hub. But each is designed to help the company stay competitive amid a quickly fluctuating digital landscape.
Here’s a look at the state of innovation labs at fashion and beauty brands.
So what exactly is an innovation lab?
Innovation labs (also referred to as tech hubs or innovation accelerators) are essentially glorified research and development teams that work internally at brands, often with a particular focus on technology and data. If they’re not located within the offices of the brands, they operate remotely from tech-centric regions like Silicon Valley. The groups work both independently and collaboratively with their parent companies.
Why were they started?
They were largely started as an attempt to keep up with the accelerated pace of technological advancements. While some brands offer company-wide hackathons on a monthly or annual basis that allow employees from all departments to contribute to new products, innovation labs were formed to allow employees to essentially hack on a full-time basis. “The concept of the lab came about because the speed at which the industry was changing was getting fast. There needed to be an opportunity to innovate and change at that pace, while continuing to operate the existing business,” Antony Ritch, COO of Westfield Labs, told the National Retail Federation in 2015.
What do they do, exactly?
Priorities vary by brand, but a major push for many innovation labs is identifying new ways to use technologies like augmented reality and virtual reality. One of the main focuses of Scott Emmons — head of innovation and the one-man-show behind Neiman Marcus’s iLab — is opening up internal communication across departments and executives so they better understand the value add of new tech. As a result, he’s been able to help launch augmented reality “Memory Mirrors” in select stores, that are not only interactive, but allow consumers to store customized information and data.
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Other labs are focused more on product ideas. Groups like Kohl’s K/Lab — which functions as a three-person team that examines social platforms, influencer networks and customer behavior — uses data directly to design clothing for its K/Lab fashion line. Likewise, L’Oréal’s Technology Incubator was the brains behind the brand’s smart hairbrush, which monitors hair analytics and tracks them in an app.
Got it. Are there niche innovation labs?
Yes. For example, Kering’s Material Innovation Lab is focused on areas like identifying how to better incorporate recyclable textiles into product development. After finding methods to better integrate sustainable sourcing and development, employees like Cecilia Takayama, the lab’s director, are tasked with finding ways to roll out the new processes across Kering’s brand portfolio.
Are innovation labs making tangible advancements within companies?
Yes and no. While companies like Neiman Marcus have been able to implement ideas like the Magic Mirror, others are finding the innovation hubs as a drain of resources. Nordstrom decided to nix its program in 2015 and move its innovation employees elsewhere. In many cases, newer, digitally native brands benefit the most from labs, since they have less infrastructural red tape to navigate when pitching new strategies.
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“The most successful retail labs are companies that didn’t exist a decade ago,” Ana Andjelic, former senior vice president and global strategy director at Havas Lux Hub, wrote in AdAge. “They swiftly introduced and tested new business models, new distribution and supply management practices, a novel go-to-market strategy and audience-building tactics.”
