How to solve the innovation dilemma

A recent meeting of the Chamber’s Retail and Consumer Brands Forum explored how brands can maximise their innovation and gain visibility in competitive markets.

‘Innovation is invention applied commercially.’ These were among the opening remarks by guest speaker John Lawrence, Vice President Global Consulting at SGK, a leading branding consultancy. Put another way: ‘Inventions are cool; innovations are cool and useful – such as new products or services.’

According to Lawrence, successful and innovative companies are ones where innovation is a key strategic priority of the business. This means good governance from the top down. Successful companies in this area also invest in research and development, with the goal of creating new goods and services that address needs and create new values for consumers.

Crucially, companies must also take their new idea to market with a sophisticated marketing strategy. Success or failure of a commercial innovation relies on a sustained and impactful marketing and communications.

‘There are plenty good ideas, it is how you communicate that to your customers,’ says Lawrence, who points to Apple as a company with a track record of bringing inventions to market in the most impactful ways.

He also cites Patagonia as a best-in-class example of a company that communicates well about its innovations, as well as espousing sustainable credentials. Lawrence notes that sustainability will be an increasingly important backbone of innovation going forward.

Investment strategies

Lawrence’s second adage is: ‘Innovation is a strategy not a deliverable,’ and he outlines two investment strategies that companies employ for their R&D and innovation activities.

In the first is a strategy, investment is funnelled into legacy parts of the business – established areas of the company products and sales. Here, he cites the ‘Nike by You’ programme, which allows customers to co-create their sneakers with the iconic brand.

The second strategy is investment in new extensions on products and services, often with the intension of launching new product lines. The British technology company Dyson, best know for their hoovers, has successfully innovated in adjacent areas to their technological expertise, such as floor and table-top fans. Their recent launch of a sophisticated hair curler was a first foray into the beauty sector – and cost £25 million to develop.

Lawrence acknowledges that investing in innovation is costly, but he advises many businesses that it represents good ROI. Apple, for instance, spends five percent of their annual revenue on innovations that have become the hallmark of the business.

‘To stay relevant, brands will need to innovate in their businesses, products and services. It is a constant pursuit, and an opportunity to invent your future,’ says Lawrence, who says that businesses should not be shy to iterate, to test ideas and see what works and what doesn’t.

Case study: DUOLAB

The session also welcomed Alain Harfouche, Managing Director of Duolab, an innovative start-up in the L’OCCITANE Group, who spoke about the process in leading an innovation initiative within and established brand.

The Duolab system offers on-demand personalisation of freshly blended, preservative-free skincare, along with experiential services such as a skin diagnostic tool and an intrinsic recycling programme of the used capsules.

As Harfouche developed the initial product with his team, there were key learnings. They soon realised that if the product was to be successful, they needed to find away to scale the idea.

‘It became clear that we had to move from the idea being only a product to create a whole experience around it,’ says Harfouche. ‘This is when we developed the diagnostic tool and recycling tools, which offer important customer touchpoints and create meaningful experiences around the brand’s identity.

These service aspects of the offering also create opportunities for a connected platform for a data collection and learning linked to future iterations and offers.

He noted a key aspect of the project’s success was the implementation of a new way of working within the group. A ‘team of teams’ approach was instituted. Small teams were given large amounts of autonomy in their decision-making.

‘We moved from a more traditional model of “doing things right,” to an agile model of “doing the right things,”’ says Harfouche, who recommends companies to make room for mistakes when developing their innovation. ‘You need to test and learn – until you get it right.’

 

The Retail & Consumer Brands Forum is co-chaired by Geoff Skingsley, Chairman at L'Oréal UK & Ireland, Alain Harfouche, DUOLAB Managing Director, L’Occitane Group, and Catherine Palmer, General Counsel at KellyDeli. For information about the Forum’s next meeting please visit the Forum's page. The Forum is sponsored by Econocom. Find our latest interview with their UK Managing Director Frances Weston here.

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