Why retailers are hoping that speculation will drive innovation.
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French sporting retailer Decathlon has launched a new subsidiary that is dedicated to identifying and developing people and businesses that share its values. Decathlon Pulse will seek out innovative ways to drive new long-term growth.
Decathlon launches new subsidiary to build, invest in and acquire new businesses | Retail Gazette (www.retailgazette.co.uk).
The strategy will see Decathlon invest in highly innovative companies, build new concepts and seek to create standalone businesses with ‘trailblazing’ business models.
The idea of identifying new opportunities and investing in them is both as old as the hills and right up to date. Setting up a specialist division just to find those who are truly innovative is a smart move and, while it is rare in retail, it has been proving its worth in other sectors.
UK broadcaster ITV, for example, has been running ITV Adventures Invest for the last few years. An investment fund, it sees ITV give media space for equity, essentially giving innovative players access to a major league TV advertising budget in exchange for equity in their brand.
ITV announces investment in what3words | ITV Press Center | (www.itv.com).
Plant-based food brand THIS, geolocation app What3words and online estate agency brand Purplebricks are among the names that ITV has invested in. If you hadn’t heard of those brands before ITV got involved, you certainly would have done afterwards.
For the retail industry, which has evolved to have fairly rigid expectations for the returns it might expect from investment in opening new stores or building new distribution centres, the idea of investing in an unknown quantity in the hope that it will be the next big thing might seem like a brave step.
Any investor would acknowledge that not every pick will turn out to be a winner. But those that are winners offer the opportunity for significant growth, access to new sectors and a wider share of the market. This is precisely what retail needs.
After years of gradual store closures, and with many high streets full of empty shop units, what retail needs is new faces, new ideas and new formats. For a major player like Decathlon to recognise that is a big step in the right direction.