DISRE - Data Driven Innovation in Specialized Retail Ecosystems

There is limited tradition for research-driven innovation in the Norwegian retail sector that is now facing increasing competition from international platform companies. An example is Amazon with its extensive experience from big data analytics, research driven algorithms and cloud-based data storage services. To meet this challenge, the DISRE project will explore how data and knowledge sharing between speciality retailers generate alternative competitive advantages in an ecosystem rather than through platform governance and architecture. The initiative is organized in a novel and alternative "triple helix"-collaboration between speciality retailers Voice, Happy Homes and Jernia, the knowledge provider inFuture, researchers from University of Southeastern-Norway (USN), University of Oslo, NIFU, Foundation IMIT and Luleå University of Technology, and the employer organization Virke, and is structured around three data driven innovation concepts. For each of the concepts, we explore alternative business models supporting the innovation, how regulation and policy stimulates and restricts it and if the actors involved in the ecosystem is culturally, structurally and technologically prepared to share data and insight beyond previously established patterns. In 2021, the project has been in an initialization phase establishing suitable principles of research work, collaboration forms, scientific method and data infrastructure. In addition, a PhD student with considerable experience from data driven innovation in the private sector, particularly from retailing, has been employed. The first empirical investigations of regulatory, cultural and technological conditions for data driven innovation in speciality retail have also been conducted. The first findings indicate that privacy regulation is a considerable challenge and few speciality retailer have designed and implemented privacy policies that are adapted for data driven innovation. Also, the cultural conditions for this type of innovation practice varies considerably across speciality retailers, but in general it seems to be less developed than for example in grocery retail. Technological conditions also vary between and across speciality retailers and other retailing sectors. Our next step is now to identify and investigate the value potential, both to consumers and retailers, of the first of three data driven speciality retail concepts. It is planned to originate from the ecosystem and context of one of the participating speciality retailers' customers and will use service design for service ecosystem innovation as the main tool in this process. We have also announced a position as Postdoctoral candidate in the project and look forward to having this person deeply involved in our research activities from early 2022.

The retail sector in Norway has limited tradition for research-driven innovation. This is particularly evident for speciality retailers that are currently challenged by platform company entry. However, speciality retailers can match the competitive advantages of platform companies by aggregating and sharing data in their ecosystem, but this is a “wicked innovation problem" where individual retailers lack the incentives to release value from positive production externalities. The DISRE project aims to corrects this market failure by organizing a novel and alternative "triple helix"-collaboration between speciality retailers Voice, Happy Homes and Jernia, KIBS provider inFuture and university researchers from USN, UiO, NIFU and Luleå. We develop the knowledge required for data driven innovation in speciality retail ecosystems through work packages (WPs) that explore three service concepts for data driven insight in cycles of service ecosystem design and applied research. Generic WPs support these cycles through more basic consumer, business model, culture, regulatory and innovation research. A novel research framework and governance form is used to link basic and applied research and engage retail research users. In addition to the speciality retailers' improved competitiveness against platform companies, the outcomes of DISRE will enable them to better support consumer journeys across retailers and service providers, for example during important consumer life events. This will increase consumer well-being and enable retail to retain its function as a supplier of ecosystem services in local cities and communities and reduce goods- and consumer transport. Results from DISRE will be disseminated to the scientific-, speciality- and generic retail, policy maker- and student audiences through a rich set of activities, including the extension of the Digitalization School of Retail with particular focus on the integration of big data analytics and business competence.