innovation

Cadillac: the new transport industry disruptor

True innovation should be bold, not incremental.

True innovation should disrupt and drive an industry forward by better servicing customer needs more cheaply, quicker and more efficiently than before.

Sadly, this too often means that true innovation is reserved only for the start-up world, those ambitious guys and gals who don’t carry with them the baggage and risk aversion so typical of corporate environments. Some big brands do aspire to adopt the nimbleness of a start-up; innovation borne out of bootstrapping, a “move fast, break things” mentality, and no company politics. Some brands do achieve this too, but it is rare. It is even rarer to hear of brands that anticipate the future direction of a market and beat the start-ups to the punch.

Cadillac is such a brand.

In a move that sounds more likely to be dreamed up in a college dorm room than a boardroom, Cadillac have drawn into question the whole purpose of buying a car by launching a subscription model service for their suite of vehicles, called Book by Cadillac. $1500 a month gives you access to a range of Cadillacs which you can chop and change throughout the year at a moment’s notice, without having to pay extra for registration, insurance or maintenance.

What a great example of a brand recognizing that the status quo is ripe for change, and they should be the ones that change it. Just think of the possibilities. Got a weekend trip in the country lined up and want something sporty? Swap your sedan for a coupe. Planning a road trip and need some extra room in the boot? Swap the coupe for an Escalade. Just need something straightforward for the commute? Swap back to the sedan.

Sure it means you actually don’t own a Cadillac.

But do you really need to?

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Uber: the business traveller’s safety blanket

Travelling through an unfamiliar country on business is a tiring and bewildering affair.

One of the first, and arguably most frustrating, situations happens immediately after you land. Stumbling out of the arrivals hall, with little idea what time of day or night it is, not least where on earth your hotel is, it is tempting to collapse into the nearest cab.

And I did exactly that a few days ago, stepping out into Cairo where I was greeted with a scrum of taxi drivers. The most persistent ended up charging me about £20 for what turned out to be a relatively short journey. I was, however, grateful and was duly whisked away to my hotel. It was only when I met a colleague in Egypt did I realise that Uber was flourishing and I should use it instead. No cash, no haggling on price, and a reliably efficient route. Exactly the same journey in reverse? The equivalent of £2.

So I left Egypt with a bruised ego and a renewed love for Uber.

The system works. Excellent.

 

Shooting the Elephant: Do soft drinks have to be sweet?

What’s the elephant in your room? There most probably is one if you look hard enough (check behind the sofa, it’s normally where they hide).

Or, to put it another way, what assumptions or category rules exist within your industry unquestioned? Why aren’t they being confronted and, if these rules are broken, will they unlock exciting new innovations?

It would appear that, in the soft drinks industry at least, the elephant in the room is sweetness. At the Soft Drinks Industry Conference 2015, the main bulk of the day centred on sugar and the challenge of managing sugar levels in soft drinks whilst still delivering a delicious product. Yet, within every problem, an opportunity. It felt to me that this assumption, that to be tasty a soft drink must be sweet, isn’t necessarily correct. Is the pursuit by big industry players of alternatives to sugar, or reformulating drinks to contain less sugar but still taste just as sweet, really the only way to go?

Now it sounds obvious that soft drinks must be sweet, and perhaps indisputable, but in other cultures, savoury and salty drinks sit very happily alongside their sweet counterparts. Take ayran for example, the milky, salty beverage from Turkey (great with kebabs). In 2012, 508,444 tonnes of the stuff were produced to quench thirsts and it is Turkey’s unofficial national drink (despite some controversy). Lassis, often served alongside spicy Indian meals to help cool the fire, can be served sweet, spiced or salty depending on what it’s served with. So the idea of non-sweet soft drinks is perhaps not as outlandish as it first seems.

Outside the soft drinks category, beer and wines tend to have a savoury default taste profile. It is fair to say though that even this category caters to our sweet tooth, with the rise of alcohol pops, fruit ciders and the rapidly growing “Sp-eers” category. Could the soft drinks category learn from this and similarly bridge the taste gap and bring out something non-sweet?

Some soft drinks brands are testing the water and shooting the sweet elephant. UnSweet have released lightweight lemonade, made from sparkling water, lemon and lime juice with no sugar. It’s distinctively sour taste is certainly divisive. Belvoir Fruit Farms launched a spicy ginger cordial which, although sweet, has a more complex and spicy profile than your average cordial. Both may well become successful niche propositions, and who’s to say that the mainstream British consumer won’t find these tastes palatable in the future?

A lesson for all interested parties: if you’re stuck for innovation ideas, question the assumptions hidden in plain sight. You may well surprise yourself (and your consumers) with what you come up with.

CORPORATE RESPONSIBILITY ON VALENTINE’S DAY: L. CONDOMS

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I am becoming increasingly aware of the corporate responsibility initiatives within many big companies. Be it from an environmental, social or political perspective, companies around the world are identifying the unique positions of power they are in to bring about real positive change in the world. And I applaud them for this. There are however, few companies whose social cause is at the core of what they do, rather than a tacked-on afterthought. These companies, through growing their business, directly grow the scale of their positive impact, which seems to me even more impressive.

And that’s why when I heard about L. Condoms, I wanted to share with you their story.

L. is a health company that sells condoms that are designed by women with thoughtful sourcing of the highest-quality, sustainably-tapped and non-toxic materials. The genius comes in the form of its 1 for 1 condom line: for every condom sold, one is distributed by a female entrepreneur in a developing country in need. The 1 for 1 program provides holistic distribution in Uganda and Swaziland, the country with the highest HIV prevalence rate in the world. So you can rest assured knowing that for every condom you buy, you are helping to fight the spread of HIV in a developing country! They clearly have business smarts too: I also think their 1 hour delivery service is particularly genius.

February is condom awareness month and alongside Valentine’s Day kits, L. are also launching the “Good Men: Here’s to Doing it Right” Campaign to raise awareness of their cause, which you can view below:

 

To find out more (and to buy their products), check out their website here. L. is an example of a socially conscious, forward-thinking company that through a simple idea is helping to bring about some positive change in the world.

How to determine your brand’s stretchiness: A Marmite case study

I am a self-confessed Marmite addict. I slather the stuff lavishly on toast, crumpets, and croissants. It comes out surreptitiously at breakfast buffets abroad, a foreign stowaway that liberates me from the dreaded blandness of continental breakfasts. I’d even admit to eating it with a spoon.

And I am not alone in my love for Marmite. Their figures are nothing if not impressive- the £37 million brand produces 17 million jars a year, Marmite has over 1 million likes on Facebook and its recent controversial “End Marmite Neglect” advertising campaign generated a 14% increase in sales growth in the eight weeks after launch.

So what’s next for Marmite? In order to continue its strong vein of growth, and cement its place in the hearts and minds of British consumers, where can the Marmite brand extend to? And how should brands generally decide which extensions work, and which extensions clash with their brand message? I’m not talking about minor tweaks to existing products here. I’m talking bold innovation into new categories. Over the years Marmite have entered as diverse product extensions as cheese, chocolate and branded merchandise, but is there scope for even more adventurous product innovations (and not just because I yearn for an even greater Marmite fix)?

In order to establish what extensions are right for a brand, we first need to take a step back and think about what associations the brand conjures up. Then we can determine the brand essence, and hence the scope for innovation. The purpose of defining these associations is that we can then begin to clearly identify what product categories could potentially be in scope and potentially out of scope from a brand essence perspective. By considering new product development through the lens of these brand associations, we can therefore come up with new product ideas that could authentically carry the Marmite brand name.

The added advantage of describing the Marmite brand in broader ways than simply describing the product- namely, as a savoury spread- is that it allows us to think about what the Marmite brand represents and hence, start thinking about the brand outside its current category. Taking these associations as the starting points for Marmite could therefore prove rich territory for future new product developments.

With my thinking cap on I wondered if the Marmite brand could stretch into the following categories:

A table sauce- Marmite is traditionally served on toast at breakfast, but what if it were to accompany another traditionally British breakfast, the fry up? Both ketchup and brown sauce are typically associated with this dish, but a combination of Marmite’s British and breakfast credentials could see it sit comfortably on the table too. Brown sauce is a similarly savoury breakfast sauce with a unique taste profile. What’s stopping Marmite from moving from the back of the cupboard to sitting proudly on the tabletop?

A range of dry rubs– Marmite’s savouriness is a winning alternative to the ubiquity of sweet spreads typical at breakfast time. Yet breakfast is surely not the only time a hearty kick of savouriness would be appreciated. What about a line of Marmite dry rubs for beef and chicken to turbo charge your evening meal? Think about the complexity and depth of flavour a Marmite rub could bring (FYI my mouth is watering).

A range of savoury hot drinks- admittedly Marmite’s kid brother Bovril has historically had some success being served diluted in hot water as a beefy drink. Yet, in the same way that Marmite is the savoury alternative to jam, could a Marmite drink be the counter to milky coffee and hot chocolate? With consumers growing increasingly fearful of the amount of sugar in their drinks, a savoury alternative may well be exactly what the health-conscious consumer is looking for.

A fashion tie-up– Marmite is synonymous with Britishness- and has notably released a limited edition Diamond Jubilee Ma’amite, but why should it stop there? What about Marmite announcing tie-ups with other brands which similarly play on their British heritage such as Burberry, Jack Wills or Harrods? A fashion tie-up would be particularly interesting, since a love it or hate it attitude is not necessarily a bad thing in the fashion industry, where cutting edge style is often divisive.

 

I wonder what a Marmite trench coat would look like…

 

 

Food for thought anyway.

WHY FOR ME, THE STARBUCKS CUP WILL ALWAYS BE HALF FULL

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“Why do I love Starbucks so much?” I mused, wistfully staring into the middle distance on a cloudy day, large cappuccino in hand, open copy of The Economist on the table in front.

Okay, so that didn’t happen.

And it’s not the most ground-breaking admission anyway. And yes, I know in recent times Starbucks have come under fire for their dubious tax policy. And no, I don’t like Starbucks just because they write my name on a cup.

But what is it about Starbucks that means I’d rather schlep there than face Costa, Caffe Nero, and a whole host of other independents?

When Howard Schultz came up with the idea for Starbucks whilst visiting coffee bars in Milan, he believed a coffee shop should be so much more than a place that served coffee. He envisioned Starbucks as being “the third space”- a safe space, away from the office and home, where customers could come and pick up their coffee, but more importantly somewhere they could stay too: a place to engage or rewind, to be active to work but passive to everyone else. It was this conception of the third space that was truly revolutionary; when the majority of Starbucks’ target audience split their time between work or home, Starbucks’ positioning as somewhere else you could go and socialise was powerful. Traditionally the British pub was (and still is) a comparable place: a safe space where you can meet friends and be yourself.

For me, that’s why Starbucks works. It means that no one will rush me out the door once I’ve drunk my coffee; it means that I can work and not be disturbed, or meet a friend and not be hushed. Because that’s the point- everything about Starbucks encourage you to stay for longer: its comfy chairs, funky jazz background music and muted colour scheme all encourage you to pause. And one could be cynical and say that this is so that per person Starbucks can squeeze an extra few pounds out of you, since one person is more likely to make multiple purchases over a prolonged period of time. Yet I don’t think that this would necessarily be the most cost-effective way to boost sales. Adopting a fast-service policy to get more customers through the door would surely be more effective, rather than waste space and money housing a multitude of languishing, bespectacled, Apple Mac-tapping hipsters.

So a coffee addict becomes a tech addict-Starbucks has arguably been at the technological forefront in the coffee industry (and high street at large) too. They offered free wifi, the lifeblood of the 21st century consumer, to customers before the rest of the market did, which was such a simple way to encourage you to stay and loll about.  I’m mad about the Starbucks app too, the epitome of London convenience, a battering ram for the anti-cash brigade. For the uninitiated, you download the Starbucks app to your smartphone, pre-load it with cash and pay with it, seamlessly enabling you to collect loyalty stars for free coffee, as well as build up your Starbucks Rewards status for extra freebies.

But I think at its core Starbucks is all about connections- which is why their latest campaign resonates so strongly. Because let’s be honest- coffee is coffee. Despite initially being a bastion of good coffee, the likes of Costa, Caffe Nero and others offer very good (and some better) coffee than Starbucks. And I do frequent them, WHEN I NEED A COFFEE. But if I want a place to go, and stay, then Starbucks it is. Starbucks has seen them all- high octane panicked revision sessions, low octane super-casual non-date coffee dates, no-octane pre-caffeine pit-stops. Starbucks services my need for coffee but delivers so much more.

Plus my name is almost impossible to mis-spell on a coffee cup.

 

PICK YOUR DEVICE, PICK YOUR PRICE

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This news article sparked my interest as it proposes an interesting way to segment your audience, suggested by the head of Dreamworks Animation.

The proposed idea is that you pay different prices for films depending on the device you view it on. So buying a film to play on your smartphone will cost less than it would to play on your tablet, and much less than it would cost to play the same film on your TV.

I’m not entirely sure how this will effect behaviour (will consumers really see the value of paying extra to watch a film on their TV compared to their tablet?); and further I can’t quite yet see the feasibility of the pricing structure, especially given the fact that the market at the moment is trending towards seamless accessibility of content across multiple devices (e.g. you can download a film on your laptop and use Chromecast to watch it on your TV, or the music on your phone is automatically backed up and accessible on your tablet).

An interesting musing nevertheless, and it’s great to see innovative thinking when it comes to segmenting your audience.

(Originally posted on The Value Engineers blog on May 1st 2014)

RETAIL MEETS DIGITAL

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The integration of technology into the retail space is an increasingly compelling prospect. Although some retailers fear that sales in their stores are being lost to their digital equivalents, others are beginning to appreciate that e-commerce need not be a threat. By welcoming e-commerce channels as an asset, along with other digital concepts, brands should able to enhance their overall offering.

Luxury fashion retailer Burberry has been at the forefront of the digital retail charge, and is clearly reaping the benefits. Perhaps a huge complement to Burberry’s digital strength came last year, when it announced their CEO, Angela Ahrendts, was leaving the company to become senior vice president for retail and online stores at Apple. Regardless of the products they sell, all retailers must have an appreciation for digital, and serve customers who are increasingly adept at shopping online. Ahrendts has noted that her digital strategy for Burberry has been informed by Apple, who she identifies as a business contemporary in some cases more closely than typical peers Gucci and Chanel: “If I look to any company as a model, it’s Apple,” she said. “They’re a brilliant design company working to create a lifestyle, and that’s the way I see us.”

Burberry is a case study in combining digital and offline to create a profitable model. The brand has nearly 15m Facebook ‘likes’ and 1.5m Twitter followers, yet their digital engagement amounts to so much more. Not only have Burberry moved into the digital space, but they have also moved the digital space in store, introducing a whole host of interactive digital concepts which subtly and intuitively enhance the customer experience. Notable successes have been the live streaming of their catwalk shows, which enabled customers to buy what they see; the social media site The Art of the Trench, which enables customers to submit pictures of themselves in their Burberry trench-coats, and connect with other trench-coat lovers, as well as their use of RFID (radio-frequency identification) technology, which is particularly inspiring. A chip placed into each product triggers RFID-enabled mirrors in changing rooms to transform into digital screens, displaying information about the craft and detail of the garment being tried on. This gives customers the added bonus of more product information in a fantastically intuitive way.

These digital concepts work with, not against their stores and general offline offering. They enhance the customer experience in store by appreciating how their customers shop and want to interact with the Burberry brand. Having an appreciation for e-commerce and utilising it effectively to increase revenue is not a new trend, but integrating digital with a light touch to improve the customer experience seems increasingly prevalent in the marketplace, especially as the wider population are becoming increasingly tech-savvy and unafraid to interact with brands online. Ironically, such a tactic could well preserve the high street and enhance the shopping experience. It is certainly an exciting direction for retail to be heading.

(Originally posted in The Value Engineers blog October 18th 2013)