Innovating with the Ecosystem: Why Collaboration is the Key to Retail’s Future

Innovation in retail doesn’t happen in isolation. It thrives when retailers, investors, startups, accelerators, and academic pioneers come together to experiment, scale, and commercialize new ideas. As part of our continuing series from the 2025 Retail Innovation Forum in London, this blog explores how ecosystem collaboration is shaping the next wave of retail innovation?

One message is clear: great ideas are only the starting point. Real impact comes from partnerships that help scale those ideas into commercially viable solutions. Here are five key themes that emerged.

1.  Retailers Need Partners to Scale Innovation

Large organizations have resources but often lack the speed and agility of startups. Increasingly, they are turning to external partners such as venture-backed startups, accelerators, or research labs to help them test and scale new ideas. PwC research finds that companies participating in ecosystems are 1.7x more likely to be faster to market, 1.2x more likely to be agile, and 2.3x more likely to be highly innovative than peers relying solely on their own R&D capabilities (PwC).

Retailers are increasingly building formal pathways for innovation, from open calls for startups to dedicated venture arms and accelerator partnerships. These approaches allow them to access fresh thinking while ensuring solutions are enterprise-ready. Without these partnerships, many promising innovations would never reach customers at scale.

2. Startups Need Help Bridging the Commercialization Gap

Startups bring agility and bold ideas, but many underestimate the operational complexity of scaling within large retailers or CPGs. The “commercialization gap”—the space between a successful proof-of-concept and a large-scale rollout—is often where ideas stall.

Ecosystem partners like accelerators, VCs, and corporate innovation teams help bridge this gap. They provide guidance on go-to-market models, help startups adapt their solutions to enterprise requirements, and connect them with industry decision-makers who can champion adoption. This type of support is often the difference between a clever demo and a solution that can operate across hundreds of stores or thousands of SKUs.

3. Academia Remains a Source of Untapped Innovation

Some of the most transformative technologies originate in universities, but they often remain “trapped in the lab” without structured industry collaboration. Translating research breakthroughs into commercial applications requires mentorship, entrepreneurial training, and access to industry partners who can validate and scale them.

Retail and CPG companies stand to benefit significantly from this collaboration. Academic advances in computer vision, material science, and linguistics, for example, are already powering innovations in shelf monitoring, sustainable packaging, and customer understanding. Programs like Conception X demonstrate how giving PhD researchers entrepreneurial pathways and industry mentors can unlock hidden potential and bring science-backed innovation into retail ecosystems.

4. Geographic Differences Shape Innovation Models

The way ecosystems function varies across geographies. In Europe, retailers themselves often drive innovation, incubating and co-funding solutions alongside partners. In the United States, venture capital and accelerator models play a more central role, enabling rapid experimentation and scale but with less direct retailer involvement. Neither approach is inherently better, but the differences create opportunities to learn. European ecosystems can adopt more of the U.S. model’s speed and risk-taking, while American ecosystems can benefit from the structured pathways and retailer involvement seen in Europe. Increasingly, cross-border initiatives are blending these models to accelerate innovation globally.

Cross-geography collaboration also helps organizations break into new markets more quickly and cost-effectively. Partnering with retailers, investors, or accelerators outside a home region provides immediate market knowledge, distribution access, and credibility. For startups, this means faster and less expensive entry. For retailers, it enables easier adoption of innovations already proven elsewhere. Global initiatives like the W23 venture fund, which is funded by five leading retails around the world – Tesco, Woolworths, Ahold Delhaize, Shoprite, and Empire, show how collaboratively pooling resources across continents accelerates international expansion and scale.

5. Collaboration Beats Silos

At the heart of any successful ecosystem is trust. Innovation partnerships work only when each participant, whether a retailer, brand, startup, investor, or academic, feels that real value is being created for them. The focus must shift from control to co-creation. Partners need to align incentives, share risk, and ensure that innovations deliver benefits across the chain. When collaboration is built on trust and shared value, adoption is faster, partnerships last longer, and innovations scale more successfully.

Ecosystem Innovation in Action: Real World Examples

Tesco’s Red Door Initiative
Launched in 2020, Red Door invites innovators with disruptive ideas and emerging technologies to connect with Tesco’s Group Innovation team, a central access point for entrepreneurs to introduce and scale their solutions alongside one of the UK’s largest retailers.

The Group Innovation team evaluates submissions swiftly, supports successful innovators in navigating Tesco’s operational landscape, and helps implement pilot projects. This initiative has already attracted hundreds of proposals and enabled rapid experimentation by aligning startups with the right people, processes, and executive sponsorship within Tesco.

Through programs like Red Door, Tesco demonstrates how an organizational innovation ecosystem, built around structured outreach, internal innovation teams, and rapid piloting, acts as a powerful enabler to transform startup ideas into commercially viable solutions in retail.

REWE Digital’s Collaborations
REWE Digital, the tech arm of Germany’s REWE Group, has partnered with startups in areas such as AI-driven customer insights and delivery/logistics innovation. These partnerships focus on improving in-store experience, personalizing customer journeys, and building more efficient e-commerce and delivery networks.

Target and Shipt
Target acquired Shipt, a same-day delivery startup, to accelerate its omnichannel capabilities. Shipt continues to operate independently while fueling Target’s same-day fulfillment operations, a critical innovation in improving customer convenience.

W23 Global Venture Fund
Five major grocery retailers (Tesco, Woolworths, Ahold Delhaize, Shoprite, and Empire Company) teamed up in 2024 to launch a $125 million venture fund investing in startups that are transforming consumer experience, grocery value chains, and sustainability, providing entrepreneurs with funding and potential access to adoption across multiple retail markets.

Looking Ahead: Building the Ecosystem Advantage

The takeaway is clear: developing and nurturing an open innovation strategy is no longer optional. The future of retail innovation lies in the strength of its ecosystems and our joint ability to break down decades of siloes between ecosystem stakeholders. Whether through structured retailer–startup programs, venture capital partnerships, or research collaborations, the ability to connect ideas, capital, and scale will define who thrives in the next decade.

Innovation insights powered by the dunnhumby Retail Innovation Network

These insights were collected by gathering feedback from our Retail Innovation Network, the fastest growing global open innovation programme for retail technology leaders. We would like to thank contributing panellists and showcase participants, including Sandra Stanley (dunnhumby), Manuel Queiroz (Bright Pixel Capital), Darrian Harris (Fuel Accelerator), Carrie Baptist (Conception X), and Sam Thompson (Progress Ventures).

To receive insightful thought leadership and engagement, explore joining the Retail Innovation Network, the fastest growing open innovation networks in retail, for free at www.dunnhumby.com/ventures and find out more about the next Retail Innovation Forum in Bentonville at www.dunnhumby.com/retail-innovation-forum.