Test or Be Left Behind: How Experimentation Fuels Retail’s Next Big Wins

In the ever-changing retail landscape, adaptability is key. Consumer behaviours evolve, technology races forward, and competition intensifies—retailers must innovate to remain relevant. Experimentation has become a vital tool in retail proposition development, enabling businesses to test hypotheses, refine strategies, and respond to customer demands with precision. By nurturing a culture of experimentation, retailers can uncover what truly engages customers, optimise their offerings, and secure a competitive edge.?

This article explores how experimentation drives success, spotlighting insights from retailers across the globe, and offers practical steps for building an experimentation culture in your own business.

Why Experimentation Matters in Retail

Put simply, experimentation replaces guesswork with evidence(!), allowing retailers to validate ideas before scaling them. It is a structured yet dynamic process: hypothesise, test, measure, and iterate. This approach reduces risk, fosters innovation, and ensures propositions align with customer expectations - crucial in a world where seamless omnichannel experiences, personalisation, and value are non-negotiable.?

Done well as retailers - you learn fast, simply and often - key when you are navigating the fine margins of a competitive edge!

There are numerous retailers that have adopted an experimentation culture along their transformation journey.? I would argue that some of Walmart’s latest financial performance reported last week is a testament to the power of experimentation - particularly in how they have blended the strength of their physical asset base with the growth potential of an online channel without one compromising the other.

Last week, Walmart released its Q4 FY25 earnings, reporting a 5% increase in US revenue to $123.5 billion, with US comparable sales up 4.6% (excluding fuel) within those numbers eCommerce sales surged 20% (16% globally), now accounting for 18% of total sales.

A key driver has been Walmart’s experiments in blending online and offline experiences, while the marketplace is a massive driver of online growth (+34% YoY Q4 Sales growth), the integration of online into the physical stores base shouldn’t be underestimated with Pickup available in ~4,600 stores and delivery from store available in ~4,500 locations!

One example of an experiment that flourished is the expansion of its “InHome” delivery service, where associates deliver groceries directly into customers’ homes (even placing them in the fridge). Tested in one store and then select markets, this programme leverages Walmart’s physical stores as fulfilment hubs, merging the convenience of online ordering with the trust of in-store service. Customer feedback from early trials shaped its service design and rollout - eventually leading it to become an optional benefit of the Walmart+ membership subscription.

Walmart is not alone in leveraging experimentation. Best Buy turned to experimentation to tackle showrooming through recognising the insight and experience of its colleague base.? They recognised that front-line colleagues, those interacting with customers daily - were a vital source of insights and innovation. Rather than relying solely on centralised leadership for strategic decisions, Best Buy experimented with a decentralised, colleague-driven approach, empowering store colleagues to contribute ideas and lead localised experiments.??

A plethora of experiments came out of this approach, many of which shape today's proposition still. Frontline colleagues experimented with offering personalised product bundles tailored to individual customer needs. For example, when customers purchased home theatre systems, store teams bundled relevant accessories and arranged Geek Squad installation services, providing a seamless end-to-end solution.? This increased average transaction value and reduced product returns, as customers felt more confident in their purchases.

In select regions, front-line teams tested on-demand tech advice sessions in-store, where customers could walk in for free consultations on complex tech ecosystems like smart homes.? The hypothesis being that empowering colleagues to proactively engage with customers through educational touchpoints would build trust and drive conversion of premium products.? These pilots led to higher conversion rates for emerging technology categories and significantly improved customer satisfaction scores.

Recognising customer frustration with delivery times, store colleagues suggested and piloted same-day local delivery using third-party couriers from store inventories rather than regional distribution centres. This reduced delivery times from days to hours, boosting Best Buy's competitiveness against online giants and increasing local market share.

Finally closer to home in the UK, as part of its metamorphosis from a dated catalogue retailer to a digital retail pioneer, Argos used experimentation to fundamentally re-invent itself for the digital age.? Through local experiments, large stores were connected to smaller stores allowing inventory to be moved between stores to fulfil customer demand - improving availability in multiple stores while reducing the overall stock holding across the network.??

From this innovation the same fleet of vehicles moving stock for collection, began making same day home deliveries for over 20k products in less than four hours.? With this capability all the old rules about how big stores need to be to hold a credible range were thrown up in the air!? A colleague suggested opening a small Store in Store inside a tiny amount of spare space in a Homebase DIY shop to see how much demand it could service - the format proved a huge success unlocking more locations, a move from standalone shops with all their rent, rates and utility costs into Stores in Store and ultimately the acquisition of Argos by Sainsbury’s which went on to accelerate the programme, building Stores in Store within high footfall supermarkets.

Building an Experimentation Culture in Your Business

These examples highlight the transformative potential of experimentation, but how can you replicate this success? The first step is fostering a culture that embraces testing and learning. Here’s how:

• Encourage Curiosity and Risk-Taking: Empower your team to ask “what if” questions and propose bold ideas. Create a safe environment where failure is seen as a learning opportunity, not a setback. Walmart’s willingness to test InHome delivery, despite logistical complexities, reflects this mindset.
• Start Small, Scale Fast: Begin with low-cost, low-risk experiments in specific stores or markets. Argos’s Store in Store rollout started with one location, allowing for adjustments before broader implementation. Use these pilots to build confidence and momentum.
• Leverage Cross-Functional Teams: Blend insights from marketing, technology, and operations. At Argos Commercial, IT, Supply Chain and Store teams collaborated on fulfilment experiments, ensuring practical, scalable outcomes.
• Break Down Barriers Between Central and Frontline Teams: Too often, central teams operate in silos, disconnected from the realities of customer-facing colleagues. Frontline teams, whether in stores or contact centres, interact with customers daily and are a goldmine of insights. By fostering collaboration and breaking down these barriers, you can tap into their observations to generate experiment ideas. For example, a store colleague might notice customers abandoning baskets due to long queues, sparking a test for mobile checkout solutions. Empowering frontline teams to propose and even lead experiments not only improves relevance but also boosts engagement and ownership across the organisation.
• Invest in Tools and Technology: Equip your team with analytics platforms, A/B or Multivariate testing software, or real-time feedback mechanisms. Argos’s use of social insights and mapping tools amplified its ability to measure and refine experiments effectively.

Defining the Right Metrics and Success Criteria

Metrics are the backbone of experimentation and the importance of defining the right metrics that enable actionable insights is a topic all on its own, which I might come back to in the next few weeks!

Defining clear, relevant key performance indicators (KPIs) and what success looks like ensures you’re measuring what matters. For Best Buy, NPS, comparable-store sales and online revenue growth were critical indicators of success. Argos focused on product availability, digital participation, product collections, and customer sentiment.?

When setting your metrics:

• Align with Goals: If your aim is to boost loyalty, track repeat purchases or Net Promoter Score (NPS). For revenue growth, monitor sales uplift or conversion contribution input metrics.
• Balance Short- and Long-Term: Immediate wins (e.g. increased footfall) should complement broader objectives (e.g. brand perception).
• Stay Customer-Centric: Metrics like satisfaction scores or time-to-purchase reflect how experiments impact the customer experience, not just the bottom line.

Managing Experiments Post-Launch

Launching an experiment isn’t the finish line—it’s the starting point for ongoing refinement and needs to be resourced accordingly. Ensuring teams think of an experiment as more a product rather than a project is key with continuous management ensuring sustained success of the experiment:

• Monitor Performance in Real-Time: Use dashboards or analytics to track KPIs and spot trends early. Argos adjusted its digital store strategy based on live social feedback, avoiding costly missteps.
• Iterate Based on Insights: If an experiment underperforms, tweak variables—like pricing, messaging, or delivery options—and test again. Best Buy refined its fulfilment model over time to optimise speed and cost.
• Scale or Sunset Thoughtfully: Successful experiments should be rolled out systematically, while unsuccessful ones should be discontinued with lessons documented for future efforts.

Questions to Kickstart Your Experimentation Programme

Ready to experiment? Start with these:

• What feedback mechanisms exist between front line colleagues and those looking to answer the below questions?
• What customer pain point or opportunity can we address? (e.g. slow checkout, limited product visibility)
• What hypothesis do we want to test? (e.g. “Offering free in-store Wi-Fi will increase dwell time and sales.”)
• Where can we pilot this idea? (e.g. a single store, a specific region, or an online customer segment)
• What metrics will define success? (e.g. sales uplift, customer dwell time, satisfaction ratings)
• How will we collect and analyse data? (e.g. POS systems, surveys, web analytics)
• What’s our timeline for testing and review? (e.g. 30 days, 90 days)
• Who will own this experiment, and how will we share learnings?

Conclusion

Experimentation isn't just a tactic, it's a mindset that can redefine your customer proposition!???

Walmart, Best Buy and Argos have all demonstrated that testing new ideas, measuring their impact, and iterating based on results can turn challenges into competitive advantages. By building an experimentation culture, defining meaningful metrics, and managing experiments post-launch, you can unlock insights that drive growth and customer loyalty.?

Start small, connect with frontline colleagues, ask the right questions, and let data light the way—your next big breakthrough might be just one test away!

If you want to find out more, or want help in shaping your approach to experimentation - feel free to drop me a line, I am always happy to listen and discuss!