November 18, 2015

Red Queen Effect: Introducing the new international study on the retail industry

Sampo Lehtiniemi

Director, Tieto

Tieto is currently taking part in a three-year joint study on the effects of technological disruption in the retail industry. Here's what we hope it'll teach us.

For a while now, we've been pointing out that innovation isn't something that happens within the walls of large enterprises and universities. Rather, innovation happens when different organisations and points of view collide - when researchers, designers, developers and end users all come together to share their own knowledge and insights.

That's why Tieto is currently taking part in Red Queen Effect: Strategies for an Innovative Landscape, a three-year joint study on the effects of technological disruption in the retail industry. Voices from retail, IT and academia will all lend their voices to the project, with Tekes (the Finnish Funding Agency for Innovation), the Oxford Institute of Retail Management and Aalto University just a few of the organisations involved in the programme.

What is the Red Queen Effect?

The Red Queen Effect is a popular theory in evolutionary science that claims an organism must evolve continuously even to survive. It takes its name from a character in Lewis Carroll's Alice books, who explains to the heroine that on the far side of the looking glass one has to run constantly simply "to keep in the same place". This is a fitting analogy for the current state of the retail industry, where traditional retailers are under enormous pressure to leverage digital channels or else lose business to competitors that do.

In terms of the study itself, we'll be comparing and contrasting their experiences in two countries: the UK, where the market is perhaps a little more advanced, and Finland, where retailers have the most work to do in order to keep in the same place.

The research will also be divided into three distinct themes. Firstly, we'll examine the nature of technological change in the retail industry. Secondly, we'll address the impact of this change on retailers' long-term strategy, both in terms of competition and consumer behaviour. Finally, we'll turn our attention to their internal practices and processes, and how this will affect their strategic change programmes.

What will success look like?

The Red Queen Effect is a significant undertaking. In academia alone, we're expecting the research to produce somewhere between four and six PhDs, which should give some idea of the scope and scale of the study. This makes it difficult to be very specific when we talk about expected outcomes.

However, I did ask Richard Cuthbertson - the University of Oxford's lead researcher on the project - what he thought success might look like, and his response was to describe three different forms that it might take. The first was the participants' contribution to academic discourse; the second, practicable new concepts that drive tangible change in the industry; and third, a change in society as a whole, such as new legislation.

Personally, my first impressions of the programme are that it'll bring together some of the most talented young researchers on the planet, encourage industry experts and academics to interact with one another, and feed back into our own research and development around the Tieto Retail Experience.

What happens next?

While it'll be some time before the study itself is over, we intend to start blogging about our progress very soon. Expect to see updates from the following in the coming months:

  • Richard Cuthbertson, research director of the Oxford Institute of Retail Management at the Said Business School, University of Oxford
  • Lauri Pulkka, Aalto University
  • Jussi Nyrhinen, University of Jyvaskyla School of Business and Economics
  • Olli Rusanen, Aalto University
  • Lauri Paavola, Aalto University

Read more: Customer Experience Management.

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