There is a strong need for innovation within the retailing sector (RS), but at the same time, retail sector innovation is not yet fully understood. This paper aims to investigate retail innovation and identify its specific characteristics as being both process- and product innovators, as well as presenting a case whereby the University could act as an innovative hub. Retailers are open innovators - they engage in both technological and non-technological innovation and they in- novate incrementally, focusing on business model innovations. We elaborate upon the different contributions that a retail research laboratory could give to retailers as well as to the academic community. We also discuss the potential of such a laboratory in a practice approach focusing on the advantages to researchers, consumers and retailers, and the potential in linking research on business models with a practice-oriented approach.