How to get innovative with your innovation strategy

For 50 years or longer, most consumer goods companies have line extended and line extended as the safe bet for growth. New sub-categories have been created. Then saturated. Incremental innovation, incremental sales, incrementalism. But this has led to staggering clutter. Look at beer. We’ve got endless brands offering variations of local, international, craft, low-carb, low-alcohol, etc.

More choices than a consumer could possibly want. In fact, it has created a paralysis of choice.

Retailers are starting to wake up to this and are consolidating and replacing endless aisles of brands with their branded products.

Indeed, there is pretty much no meaningful, genuine unmet need left in these categories. No wonder that, in developed markets like Australia, consumers don’t give a damn about most of it.

This is further compounded by digital, which has created lots of new, interesting and often free ways to spend time and energy. Brands, as means of self-expression, have lost their power.

And it costs more and more money to sustainably launch NPD into the market.

No wonder incrementalism is a dying art. Time to innovate innovation. How?

1. Think big

Classic incrementalism starts with some astoundingly detailed quantitative understanding of markets and consumer needs, looking for some empty percentage that a new product could target. This is bottom up. Start top down, and get to your empty percentages last, if at all.

Ask big questions like ‘what’s my brand’s role in culture?’ and ‘what is my brand’s human purpose, making my target’s life better?’ Around this bigger purpose, what unmet consumer needs exist that your brand, through a combination of products and services could fulfill?

Check out the NBA in the US. They reinvented their purpose from sport to entertainment – they now have their own TV network with 61 million subscribers. Profitable.

2. Think utility

Digital technology offers new innovation opportunities that when combined with your product, offers consumers new utilities that have genuine value.

How can the purpose of your brand and your product set, when combined with any consumer friendly technology (eg. a smart phone) offer a new, exciting utility to people?

Check out Lego and their apps. Brilliant, valuable utility that has you building again quick-smart.

3. Think functional integration

To escape incrementalism, you need to ask how you can deepen your relationship with your consumer, not expand it. This is what functional integration is about – integrating your suite of products together around your deeper, meaningful purpose.

The innovation of 2012 best illustrates this: Nike Fuel Band. From apparel and Nike+, Nike moved into the realms of functional integration by bringing their products together around the purpose of motivating and assisting in staying fit. New revenue and increased loyalty to their core products resulted. Very smart.

4. Think product and promotion as one

Instead of developing a product and then worrying about how to promote it later, consider bringing the two together in one cohesive, fresher, more exciting combination. Magnum’s Seven Deadly Sins is a shining example of the potential of this approach.

Consider bringing your product, advertising and digital agencies to innovate together, but also think about mixing up whom you give the briefs to. You might get something more innovative. Leo Burnett Sydney’s Cannes Creative Effectiveness Lion winning Bundaberg Rum Watermark product/campaign is a great example of exactly this.

Other big winners are product/promotion partnerships. The success of Target’s Designer Range (partnership with designers like Paula McCartney) is case in point.

While these are four distinct, innovative ways of driving innovation, also think about how you can mash them together. You never know what you might innovate in the process.

 

Luke Atkinson
BY Luke Atkinson ON 23 April 2013
Luke Atkinson is deputy head of planning at Leo Burnett Sydney