How Product Innovation Creates Wins in the New Commerce Landscape
Adapting Product Innovation Strategies to Pandemic and Post-Pandemic Realities
Retail has always needed to adapt to shifting trends in the marketplace. With the onslaught of the COVID-19 pandemic, companies of all types have been forced to reassess marketing programs, product offerings, and supply chain strategies in warp-speed. Many companies have learned that product innovation can create wins in connecting with consumers during the new commerce landscape.
At the forefront has been a notion of “essentials versus non-essentials” and how manufacturers and suppliers approach the pandemic-induced transformation of shopping behaviors, manufacturing capabilities, and supply chain disruption.
“Innovation is going to be critically important across the board, as it relates to the essential category. I think there will actually be a push by a lot of retailers to expand offerings in those areas and then make room for that expansion in some of those higher-demand categories.”
Urea also noted that companies will have to “sharpen their pencils” as it relates to non-essential categories. Companies will have to account for progress in areas like differentiation and incremental category growth, as a part of what they are bringing to the table from a product innovation standpoint.
Refocused Product Development, Based on Consumer Needs
In terms of new product development, some companies have refocused their efforts. Sean Riley of Dude Products shared with the panel the example of his company’s Dude Bomb product, which was deemed non-essential throughout the depths of the pandemic. As a pivot, Dude Products launched an at-home bidet attachment to supplement the demands of the toilet paper supply craze that occurred at the beginning of the pandemic.
“It was important to step back and ask, ‘What is something core that the consumer needs, and how can we do that better?’ It’s almost going back to your roots, simplifying and then innovating your way back. [The bidet] was a way for us to double-down on innovating. We may have to pull back [certain] innovation dollars and redeploy them into what we do best.”
How Product Innovation Helps Connect to Your Consumer Base
One key point, specifically among retail brands, is being conscious of the messaging and content being promoted during the pandemic universe. Ideoclick’s Andrea Leigh referenced the dichotomy between Banana Republic, who was still deploying “work wear” digital advertisements and Anthropolgie, who immediately recognized the risk of appearing tone-deaf and created an entirely new lifestyle section on its website that covered things like working from home, sprucing up your home office, and creating WFH playlists.
“Where the innovation has to come from now is around messaging and content; being more timely and relevant. And, figuring out different ways to engage with customers, even though [companies] may not be in what’s considered an essential category. It’s not necessarily about products, but rather how you’re thinking about the customer and really understanding where they are at.”
Jessica Hauff of L’Oreal echoed Leigh’s sentiments about keeping the customer as the focus—and even redeploying internal resources in order to meet consumers’ needs.
“Hair color was becoming the new toilet paper. So many women were buying at-home hair color for the first time in their lives. But, it can be a very intimidating process. It’s messy, it smells, there’s a four-page pamphlet of instructions and warnings. We really ramped up content—especially digital content—around helping people pick the right shade, helping with their first-time application, how to follow it up.”
L’Oreal also utilized its tech center participants as company ambassadors, since those individuals were no longer able to go into a physical office. “They started creating content, doing live chats, webinars, etceterra with consumers. We just really tried to think about creative ways to connect with consumers and make sure they know we’re still here,” added Hauff.
SKU Rationalization: Keep the Discussion Going
With many retailers (supermarkets, drug stores, some “bigger box” retail players) grappling with the essential versus non-essential argument, session mediator Kevin Coupe of Morning News Beat raised the very pertinent and prudent question about reducing SKU count. All panel members agreed this approach is not simply black-and-white.
Riley proposed that certain suppliers can actually benefit from a bit of diversity, instead of “betting the farm” on two or three big brands—citing the shortage of toilet paper and related items. “I agree about making the selection simpler. But, suppliers that don’t have a lot of diversity in one category—[leads to] why they ran out of toilet paper and flushable wipes. Suppliers that carry more brands were actually able to serve the customer better.”
For retailers that are still very focused on a brick-and-mortar presence, Leigh cautioned they are going to need a reason to draw people back into the stores. “If they really shrunk their assortment, I think they run a risk. You have to do what you have to do, but you also have to be careful about what you’re cutting and why.”
Hauff reinforced this necessary balance, based on customer-centricity and the costs involved with supply chain issues and in-store stocking. “Each [retailer] is going to find this a bit differently. Take Target, which people think of as a place to go and discover new brands; new products. For them, not to offer that breadth of assortment wouldn’t be in line with their positioning in the marketplace. Other retailers that are more of a replenishment mindset, they probably have an opportunity to scale back.”
Message of the Day: Be Quick on Your Feet
As all panel members look to the future, they are cautiously optimistic about pandemic recovery—but are also cognizant a post-pandemic recessionary period is likely inevitable. Ultimately, a company’s ability to nimbly adapt and implement change will determine its continued success in the months, and years, to come.
To learn more about how Replenium helps brands and retailers be more prepared for future, connect with us here.