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3 Ways Hackathons Make Retailers More Innovative

Hackathon Retail

Hackathons are events where external collaborators work with company employees to quickly generate business and technology solutions in a short period of time. The imposed time limit, which can range from 24 hours to a week, enables participants to focus only on the most important components of a new product and receive instant feedback from peers and judges. This means that companies can create working prototypes sooner without being stalled by other business processes.

In the past few years, hackathons, a staple practice in tech companies like Google and Facebook, have seeped into the retail industry. In 2012, Tesco hosted a hackathon in their UK headquarters that generated an innovative smartphone app that has since been passed onto consumers. This year, to build on last year’s success, Tesco is hosting another hackathon—but across its global offices. Home Depot is following the same example. In a bid to stay competitive in the digital age, more retailers are turning to hackathons to innovate faster, cheaper, and better, and here’s why:

1. Hackathons give you better quality results.

External collaborators offer fresh perspectives on existing problems, and range from developers sourced from the crowd to technologists invited from established companies. At the 2012 Big Brand Hackathon in San Francisco, Home Depot and co-host Kraft Foods opened up their code to external developers and received more than 40 potential solutions in less than 30 hours to prompts like how retailers can improve branding and increase consumer engagement. The hackathon is a competitive team-driven sport and pits groups of developers and company employees against each other. When teams of skilled and driven professionals compete under a common goal, the quality of ideas goes up.

2. Hackathons reduce innovation costs.

The winner of a hackathon typically receives “up to $10,000”. On the other end of the spectrum, New York City Mayor Michael Bloomberg offered his personal gratitude as a prize in the 2011 hackathon to redesign New York City’s website, and the event still received a great turnout. Hackathon participants value the status of being associated with a big brand over large or guaranteed prizes. This means that companies will attract more potential solutions for a couple thousand dollars instead of committing to hiring an expensive technology firm whose solution may or may not work. While the cost of refining and implementing a hackathon-generated idea will vary depending on the idea, the cost of the overall product will be substantially lower.

3. Hackathons build relationships.

A hackathon is a high-energy brainstorming session complete with lots of laughs and food. Similar to an engagement event, hackathons are hosted outside of normal working hours and allow employees from all levels of the corporate hierarchy to interact with each other and provide input in an open atmosphere. Hackathons broaden the dialogue between the company and its market by sourcing ideas from existing customers through engagement and collaboration. According to Home Depot, hackathons are about diving directly into the customer pool and creating partnerships from the ground up.

In 2013, 90% of smartphone owners use their devices to hunt for deals before shopping and 84% of smartphone owners use their mobile devices in retail stores to shop. Consumers are migrating to more innovative and interactive technologies, and the pressure is on retailers to constantly come up with new ways of interacting with them. A hackathon is an economical way of generating many high-quality ideas in a short period of time without committing to any one idea. Faster ideation and prototyping translate into mistakes and learning opportunities that can be helpful to the company as a whole.

So why not host a trial hackathon in your company? As long as there is trust, acknowledgement, and an open mind, a hackathon can be one of the most rewarding ways to kick-start a new campaign and strengthen employee relations.

Here are some tips to get you started:

Before the hackathon:

1. Understand what you want to build. Depending on the product, you may want to set up appropriate screening measures to determine participant eligibility.

2. Assemble the event management team. The team is composed of internal employees and external collaborators like sponsors and marketing managers. A sponsor will help cover venue, prizes, and (sometimes) food costs, and can be part of the judging panel. Marketing managers will be in charge of advertising before and during the hackathon.

3. Choose the date. Hackathons are usually hosted on weekends to avoid conflict with the participants’ day jobs. Make sure to leave enough time to promote the event.

4. Set up guidelines and communicate them to participants ahead of time. What are the assumptions you made about the product? What are its costs, main features and limitations? Use these guidelines to create metrics for what the hackathon teams can and cannot do. Distribute these guidelines to the judges as well.

5. Communicate the event schedule. This allows participants to get a sense of what is possible to prototype within the allotted time period.

During the hackathon:

6. Monitor everything. Update the event management team, participants, and sponsors about the time limit and progress. Are the hackathon teams hitting any roadblocks? Do they have questions that only an event manager can answer? Are they following the guidelines established before the event?

7. Keep track of the hackathon as it progresses using social media (Facebook, Twitter) or the company website. The hackathon and its results can be used to market the company’s initiatives and community involvement.

8. Encourage questions during the final pitch. Questions increase participation and reveal additional information about a prototype’s features, limitations and opportunities for improvement.

9. Acknowledge the participants! Everyone that showed up, winning team or not, has now established a relationship with the company.

After the hackathon:

10. Gather important learning points. What were the major successes of the event? The unexpected? What could have been done differently? Share these learning points with participants and broader audiences.

11. Determine the next steps for the prototype development. Make sure to plan for any legal, business, and financial requirements and contingencies.

12. Pat yourself on the back! A hackathon is a stressful experience, but the insights and results are worth it.


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