What: A new study by Boston Consulting Group and the World Retail Congress reveals that increased investment in innovation correlates with higher returns in the retail sector.

Why it is important: The report highlights the necessity for retailers to adapt to technological changes and shifting consumer expectations. Retailers that invest significantly in innovation, such as AI, e-commerce, and operational improvements, not only achieve higher returns but are also better positioned to compete in a rapidly evolving marketplace.

Research from Boston Consulting Group and the World Retail Congress indicates that retail leaders who invest heavily in innovation tend to outperform their peers. The study, based on a survey of over 400 global retail executives, shows that high-performing retailers invest 13% of their revenue in innovation and see a 21% return on investment (ROI). In contrast, those investing only 3% achieve a 9% ROI. Key areas of focus for these investments include operational improvements, e-commerce enhancements, and big data/AI/analytics. The report stresses the importance of embracing a culture of creativity, experimenting with multiple initiatives, and developing partnerships to sustain innovation. This approach is crucial as retailers face challenges from economic pressures and the integration of new technologies.

Retail leaders who invest more in innovation will see higher returns, report says