Retailers Dominate Forbes Most Innovative Companies In The World List
By Brianna Ahearn, contributing writer
In retail, it seems companies are always in a race to stay more relevant and more innovative than their competitors. To say present in the consumer's mind, companies have to constantly evaluate their technology and operations to adequately meet customer needs and increase sales. Business publication Forbes recently published their list of 100 Most Innovative Companies in the World. Among those receiving the honor were Amazon.com, Chipotle, and Hermès. Forbes uses a detailed process to determine which companies are truly the most innovative. While other such lists may be based on personal opinion as to a company's innovation, Forbes uses specific criteria. The result lets Forbes highlight companies that have consistently tried to stay ahead of the curve. The data is compiled in conjunction with that by Clayton Christensen, author of The Innovator's DNA and a Harvard Business School professor. The companies included in the list are assigned an “innovation premium.” This value, according to Christensen and Forbes, is the “difference between their market capitalization and a net present value of cash flows from existing businesses.” The measure looks at firms they see as innovative now and in the future. A good emphasis is put on research and development expenditure. The list doesn't consider any companies who haven't invested in R & D.
Although none were ranked #1, retailers dominated the list. It was no surprise to see Amazon.com at #6, especially considering the moves the retailer has made in the past few months. Since the beginning of 2014, Amazon.com has made changes or purchased options to continue its dominance as a shopping giant, including giving Instant Video credits to Prime members who chose slower shipping, adding HBO shows to Instant Video, introducing their own Amazon Wallet app, and developing a card-reader, Amazon Local Register. Amazon is also pioneering same-day delivery, which is expected to grow exponentially. Forbes referred to Amazon.com as “constantly evolving.” Other companies included on the list are Whole Foods Market and Starbucks, both of which have implemented new technology in recent months. Over all, Forbes list represents a section of retailers and companies that strive to be ahead of the curve.
The retail sector's dominance of the innovation list is a reminder of how other businesses can learn from retail. Retailers have long been pioneers in market research techniques, striving to learn more about their customers, analyze the data and create targeted campaigns that are effective. Concepts like guided selling are gaining in popularity in other sectors. Retail's ability to balance consumer needs with business priorities should put them in a position to be innovation leaders for decades to come.