There is a strong need for innovation within the retailing sector, but at the same time retail sector innovation is not yet fully understood. Retailers are open innovators—they engage in both technological and non-technological innovation and they innovate incrementally, focusing on business model innovations. This paper aims to scope retail innovation and identify its specific characteristics, as well as present a case where the Academia could act as an innovative hub, identifying and solving consumer problems. We reflect upon different contributions that a Retail Research Laboratory could give to retailers as well as contribution to the emerging literature on business models. We also discuss the potential of such a laboratory in a practice approach focusing on what retail customers do when they are shopping or making buying decisions, and the potential in linking practice-oriented approaches to business model development.