Rethinking Innovation

Rethinking Innovation: Forget radical breakthroughs, start with the customer need

When we hear the word ‘innovation’, we tend to think about eureka moments leading to radical breakthroughs, such as businesses creating totally game changing products like Google Glass. But often innovation is more straightforward than that - simply improving the way we meet existing customer needs, not inventing new products.

Why should your organisation care about innovation? Because it’s the essential ingredient for growth: innovation delivers added value to your customers, and provides a competitive edge in the marketplace.

So here are three lessons in innovation taken from our experiences at Thrive:

1.    Don’t focus on the product, focus on the customer: Opportunity lies in customer and channel innovation. Look at graze.com, the website that delivers boxes of healthy snacks to workplaces. The team behind Graze focused on the customer need: busy people at work don't have time to nip out to get a healthy snack, so instead they tend to grab what’s around the office such as crisps and biscuits. Graze offers a healthy snack box conveniently mailed straight to the customer, offering introductory discount codes and trial offers to encourage take-up. This in turn, nurtures word of mouth referral. The company doubled its sales in 2012 and launched in the US last year!

2.    Inject an entrepreneurial mindset: Effective innovation relies on an entrepreneurial mindset that embraces factors such as agility and speed. Innovation is best driven by a commitment to better solve customer needs, turning a negative (a customer headache) into a positive (an innovation opportunity). Organisations need to think like start-ups, through experimentation and rapid iteration, using technology to put working prototypes in front of the customer.

3.    Reframe the process: Effective innovation relies on asking questions and solving problems, liberated from a process-driven approach. Our experience is that responsibility for innovation is often delegated to junior brand managers; yet it would be better tasked to the more experienced thinkers who are often better at making decisions using their gut instinct rather than relying on process. Remember that most good ideas arise not out of an innovation brief but from an organisational culture that encourages creativity and experimentation.

New technologies are also important as they are changing both the way consumers shop, and also how we innovate solutions to better serve their needs. Technology presents some great opportunities for innovation: look at the emergence of mobile sites and apps where consumers browsing recipes on their mobile devices are able to shop directly for ingredients. This kind of interaction is promising to disrupt deep-rooted behaviour and brand loyalty.

At Thrive we have huge experience in the ‘free-from’ food market, which has seen a lot of innovation in the development of products for coeliacs and those who are gluten, wheat and dairy intolerant. In this market we’ve seen great examples of best-practice innovation. New food brands have emerged and the sector has had to raise its game in order to cater for this new audience. Successful innovation in this sector has therefore not been about radical breakthroughs, but the normalising of the customer experience. Those with an intolerance don't want to be made to feel like they have a problem when buying ‘special needs’ packaged goods, they want to have a normal experience, being seduced by products just like in any other food category.

Up to 20% of the UK population believe they have some sort of food intolerance or allergy when in reality only 5% have been diagnosed. Market insight has also identified that 16.5% of the UK population are regularly buying gluten-free products, despite many having no gluten allergy. 

In this market, one of the biggest customer headaches is that it can be hard to get all ‘free-from’ food in a single shop. Food company ilumi focused on this consumer problem, innovating a simple and attractive solution: making these foods easily accessible by selling a range of tasty ready meals direct-to-consumer. In the future, expect to see more innovations in other areas where the consumer is currently poorly served such as vending machines, snack foods and foods on the go.

Of course, it’s no coincidence that some of the emerging ‘free-from’ brands started out at the founder’s kitchen table, often constrained by small budgets. Such constraints help innovation thrive by being forced to be agile and flexible in order to test and adapt their ideas ( i.e. by adopting the entrepreneurial mindset outlined in #2 above).

So try to shake-up how you approach innovation in your business. Whatever category you’re in, whether you’re a retailer or a manufacturer, there is great scope for innovation in improving the way you meet existing consumer needs. In an increasingly competitive marketplace, you need to innovate to stand out from the crowd.

Source: http://goo.gl/Rh673Y