Retail Needs to Invest in Open Innovation and Venture Building Can Lead This Movement

The retail landscape is constantly evolving, driven by technological advancements, shifts in consumer behavior, and the rise of new business models. For traditional retail, which has operated for decades under well-established premises, this dynamic represents an unprecedented challenge. Fierce competition from digital players, the demand for personalized shopping experiences, and the need to optimize operations in an increasingly complex environment make innovation not just a competitive advantage but an imperative for survival and growth. In this context, Open Innovation emerges as a vital strategy and Venture Building as a powerful catalyst, enabling established companies to co-create the future of the sector.

Traditional retail faces a series of challenges that prevent it from keeping pace with the accelerated rate of change. And, if these challenges are not proactively addressed, they can lead to stagnation and loss of market share. One of the main obstacles is competition with e-commerce and digital natives. The rise of e-commerce giants and startups with disruptive business models has pressured the margins and relevance of physical stores, as consumers seek convenience, competitive prices, and a wide variety of products—attributes easily found in the online environment. Compounding this is the shift in consumer behavior, which is now omnichannel: consumers seamlessly move between physical and digital channels and expect an integrated, personalized, and frictionless shopping experience, regardless of the point of contact.

However, the sector faces obstacles in integrating its channels and offering a fluid and consistent shopping experience. Not to mention the rigidity of internal processes and an organizational culture that is often not open to risk and experimentation. Organizations with a long-standing history typically operate with rigid structures, which hinders the adoption of new technologies, adaptation to emerging demands, and the development of a truly innovative mindset among teams. This lack of dynamism causes companies to waste strategic opportunities and lose competitiveness to players, more flexible entities that are prepared to innovate rapidly.

A Open Innovation is based on the principle that companies do not need to, and often cannot, innovate alone. This approach proposes collaboration with external agents, such as startups, universities, research centers, suppliers, and even customers, to generate ideas, develop solutions, and solve challenges. This strategy can yield concrete benefits, as presented below.

• Reduction of costs and risks: external partnerships help share research and development investments, reducing the cost and risk of innovation. Startups, for example, offer pre-tested solutions, reducing the time and resources required.
• Acceleration of time-to-market: collaboration with other innovative agents provides access to ready-to-use or advanced-stage technologies and solutions, accelerating the time needed to launch new products and services. This is essential in a sector that demands agility.
• Access to new technologies and talent: innovating means connecting with emerging technologies and highly specialized professionals. This includes everything from artificial intelligence and big data to augmented reality tools and IoT, which can revolutionize the customer experience and operational efficiency.
• Fostering an innovation culture: interaction with startups and other partners drives a more agile and customer-oriented mindset, breaking down cultural barriers and strengthening a disruptive environment within the company.

Within the spectrum of open innovation, Venture Building stands out as one of the most effective approaches. It provides retail companies with the ability to connect them with ready-made solutions in the market that meet specific needs and solve urgent challenges. All this ensures strategic alignment and greater potential for impact. Retail can experiment and innovate with lower financial and operational risk. VB assumes part of the risks and optimizes the use of resources, focusing on developing scalable and profitable businesses.

In a scenario where disruption is the new norm, retail can no longer ignore this reality. Open Innovation offers a strategic path for companies to remain relevant and competitive. Venture Building emerges as a powerful tool, capable of catalyzing the creation of new businesses, aligning the agility of startups with the scale and market knowledge of large corporations. Together, these two fronts represent a concrete opportunity for reinvention in the sector, enabling the construction of a more agile future, connected to consumer needs, and prepared to turn uncertainties into competitive advantages.