The retail sector is gearing up for recovery in cities and towns across Canada. Smaller- to medium-sized businesses that rely on local spending are recognizing that the landscape is changing quickly. They’re facing not only the challenge of post-pandemic recovery, but also the need to adapt to a (rapidly) more digital landscape.
In short, the much-more-digital future of retail arrived sooner than anyone expected.
Because smaller retailers can’t navigate this alone, Interac has been working on a collaborative effort with partners across several sectors. The goal: to bring forward the best of Canadian innovation to future-proof small businesses retailers across the country.
“The challenge of helping retailers recover from COVID-19 isn’t one we can solve ourselves,” said Dinaro Ly, Head, Innovation Partnerships and Community Engagement at Interac. “As is often the case when we take on a major innovation challenge, we wanted to solicit perspectives, insights, approaches, processes and methodologies from a number of organizations. We worked on coming to an alignment on how to enhance the vitality of the retail sector.”
Bringing businesses and other organizations together to solve challenges is a major part of what Interac does, whether it’s using blockchain technology to power an energy-use proof-of-concept, enabling instant incentives for healthy behaviour, or collaborating to move the needle on open banking in Canada.
Here’s how it all came together in this initiative.
Phase 1: Focus
In summer 2020, the Future of Retail Collaborative kicked off with an initial coming together of partners at the innovation incubator based at Communitech in Kitchener, Ontario — where Interac has its own fintech innovation lab called the Interac Lab.
Sonova, maker of high-tech hearing aids, joined as a fellow lead partner. Rounding out the collaborative partners were Cineplex Digital Media, the Lazaridis School of Business and Economics, Tulip, Wawanesa Insurance, Cowan, Edgeworthbox, Faire, Lightspeed, Manulife and FairVentures.
What did they have in common? “We all cared about retail, whether it was big or small,” Dinaro said. “It just so happens that we aligned on working with small and local retailers and supporting small business, because that need was the genesis of the collaborative.”
Early discussions allowed us to crystallize our challenge into three parts: First, we had to understand how COVID-19 had impacted local retail in Canada. Second, we also had to understand how consumer attitudes and behaviours had changed — an inquiry that Interac has treated as a priority throughout the pandemic.
Third, we wanted to understand how innovative solutions could accelerate small business recovery as the country emerges from the pandemic. To answer that question, we needed to enlist more voices and perspectives — including start-ups working on new ideas, and of course small-scale retailers themselves.
Phase 2: Define
At this stage, we engaged with the partners to align on a challenge statement to rally around. To gain the perspective of retailers themselves — and to make sure we were consulting a representative slice of Canada’s shopping streets — we recruited everything from high-end restaurants to mom-and-pop dollar stores to assist as advisers.
“Then we worked toward aligning on a general challenge statement that would resonate with these small businesses,” Dinaro said.
These smaller-scale partners helped provide the insights behind a challenge statement that included a social value component. “We realized that to help small businesses build strong and intimate relationships with customers, we needed to generate unique ways to provide loyalty and incentives to shoppers,” Dinaro said. “And understand that it’s important for consumers to feel good about the purchases that they make.”
We now had a challenge statement to ignite the participation of start-ups, namely: How might we incentivize Canadian consumers to support local small businesses through charities and social values-based retail experiences? Can we leverage current or emerging fintech to drive unique online and in-store experiences in a new way?
Phase 3: Curate
Plenty of great ideas poured in: Twenty Canadian start-ups responded to the call with their ideas for retail revitalization by the deadline.
“It was exciting to see [the proposals] come through, including small business ideas from augmented reality to using sound waves to pay and make payments or leveraging turnkey solutions to implement loyalty and encourage local spending in specific BIAs,” Dinaro said.
Now it was time to kick off an evaluation process. “We went through a desirability, feasibility and viability assessment,” Dinaro said. “This is typical for us. We want to determine and understand the likelihood of developing, executing or delivering on some of the solutions that were submitted.”
We also wanted feedback from retailers, based on what they experience on the ground. For this, the Collaborative enlisted the help of four local businesses operating in Communitech’s backyard, the Kitchener-Waterloo area.
Three especially promising proposals were selected to present their ideas at the virtual Future of Retail summit in front of an audience that included innovators, investors, the collaboration partners and other stakeholders.
But all of the concepts had merit, and Dinaro notes that everyone involved in the Collaborative benefits simply from being exposed to new small business ideas.
Phase 4: Execute… and look into the future
Interac also evaluated the proposals to assess feasibility in the short-, medium- and long-term, and — without spilling any secrets prematurely — we are already exploring ways we can work with at least one of the start-ups whose idea could unleash fresh FinTech innovation for Canada’s shopping strips in the short term. Other ideas hold potential for longer timeframes, too.
Dinaro says collaboration works best when potential partners are aligned to core values and agree to prioritize those with like-minded organizations. By bringing together innovators and stakeholders around common understandings and goals, we can advance ideas that help all Canadians build prosperity.
“We know that we bring a very distinct set of assets and intellectual property into the conversation,” Dinaro said. “We like to deploy these in a collaborative way, with other stakeholders that have unique IP, perspectives, leadership, and technology to bring into the fold to amplify that impact.
“The reality is we recognize that in order to get things done quickly, we need to partner. I think our ability to deliver on new experiences is not solely dependent on us. We bring a lot of things to the table in terms of unique capabilities, but we can also benefit from bringing other people from various organizations into the fold.”