Podcast by Denyse Drummond-Dunn
A customer-first approach to successful innovation
Whether it's 60% of new product launches fail, or it's 80% or 95%+, successful innovation is rare. Listen for ideas on the reasons & some simple solutions, as well as inspiring examples from around the world.
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So what is this incredible channel? The Internet? No. Social Media? No. It's Packaging!
Is the future of retail in the stars?
With the move of most major supermarket chains to offer online stores too, plus a few successful online only stores, such as Amazon in the US and Ocado in the U.K. manufacturers are now reconsidering just how big they could or should grow their online business.
Today, supermarkets are scrambling to catch up as start-ups in many developed countries are giving this new type of freedom to consumers.
The case for bricks & mortar stores
Customers will always need to see and try before they buy in numerous categories. Offering free returns may work for apparel but not for electronics.
Several home improvement brands and stores are already offering apps which allow customers to see their potential purchases in their homes. Or their paint and fabric choices "in situ" but actually virtually.
The future of retail
I decided to summarise some of the key changes which I believe are essential to answer customers needs already today, not just in the future:
Convenience: customers have busy lives and prefer less and less to go for the large weekly shop in out-of-town shopping malls and hypermarkets. This is why smaller stores in strategic localities will develop faster in developed markets. There will also be a clear differentiation by category.
Experience: while some shopping malls are in decline, especially in the US, those that survive will shift the emphasis from purchasing to experience. By incorporating cinemas, bowling alleys, cafes and restaurants, malls are hoping to attract customers by differentiating themselves and driving more traffic to them.
However, the retailers themselves also need to start selling differently. Apple, Nike and a few others have already done this. But most outlets appear to be oblivious to the change in their customers' desires for experiential connections with brands.
Delivery: Whether we buy online or in-store, one thing is clear; we want it NOW! Fast these days is two-day or same-day delivery. In the near future, we will want our purchase to be waiting for us when we get home. Already a quarter of shoppers, according to some L2 research said they would abandon their cart if same-day delivery was unavailable.
Choice: We all know what is available around the world, thanks to the internet. Our desires are no longer limited by what is available in-store or even in our own country. We want to have the choices that others have, wherever in the world they live.
According to research conducted by Walker, by the year 2020 customer experience will overtake price and product as the key brand differentiator.
Values: Millenials, in particular, are basing their choice of brands on things such as social responsibility, sustainability, transparency and authenticity.
Corporate reputation is being scrutinised and evaluated at each mention in the press or on social media. Organisations that don't walk their talk will be rapidly found out and publically discredited.
Retail has always been about making sure that "the right product is in the right place at the right time at the right price.” The right place at the right time appears to be gaining ground over the other two. What do you think?
A customer-first approach to successful innovation
Whether you believe that 60% of new product launches fail, or the number is 80% or 95%+, the truth is that successful innovation is rare. Why is this? Here are some solutions.
Start with the Category rather than (just) the Customer
Every customer-centric organisation should start their processes with a review of the customers they are looking to please. However, in order to do this, the actual first step to both insight development and successful innovation is to identify the category in which you are, or want to compete.
Another practice I use is to zoom in or out when looking at a category, in order to identify new opportunities.
Your business is or will change - fast - so don't depend on your skills alone
Many industries have been cloned into totally new businesses as a result of technology and new customer priorities.
As just one example of this, Food companies must now adapt to delivering family time, not just ready-made meals. There has therefore been an explosion in meal kits because families want to eat better and even prepare together.
The future of the future
Google has gone from Internet-related products and services to hardware such as Pixel smartphones and Google Home, an Amazon Echo-like device. It has also expanded into energy, AR (augmented reality), VR (virtual reality) and eye-tracking.
Virgin has gone from airlines, media and entertainment, to travel, health and aerospace. Amazon has gone from an online bookstore to the general retail of a vast selection of products.
Facebook started as a social media and networking service. One year ago, its CEO Mark Zuckerberg revealed his ten-year vision, centred around artificial intelligence, global connectivity, VR and AR.
Tesla started in the automotive industry but has since moved into energy storage and residential solar panels. Today it is advancing into underground high-speed transport and space travel.
All these examples show the importance of preparing to adapt to fast innovation change impacting many industries at lightning speed.
Your next steps to future-proofing your innovation
#1. Working with new innovation levers
As already mentioned, most organisations start innovating from their past successes and current skills. While this is certainly quick, it is unlikely to lead to successful innovations. Why not challenge yourself to look at your business from a new perspective?
A personally adapted and developed wheel is a powerful tool to get people to think differently about their brand, category or offer. What all successes have in common is a deep understanding of both their customers and their own brand image.
#2. Zooming out for brands and categories
When you are successful in one category, it can be tempting to extend into others. However, this needs to be done after careful thought. Go too far from the parent brand, as the above examples did and you'll be doomed to failure. Stay too close and you'll not benefit from anything more than a mere renovation.
#3. Zooming into a category niche
It is possible to innovate by zooming in rather than out of the category in which you are in. There are again many examples of this since, in theory at least, it is simpler because you already know the category customers and can segment to appeal more strongly to certain groups of them.
Food manufacturers use this strategy a lot. They often extend into low calorie or low fat, and more recently into gluten-free, OMG-free or lactose-free offerings.
Online marketers depend a lot upon finding the right niche for their product or service offer. They have the advantage over bricks-and-mortar stores of collecting a wealth of personalised information. Together with machine learning, they can quickly develop algorithms to precisely target each person with relevant offers. I don't believe that offline retail will ever catch up, however long they collect data - unless t