Moving forward with innovation

There was a time where it was enough to do one thing and do it well. But the world has changed and continues to change… fast. In this eBook we put innovation under the microscope and assess how it can help you defend against the competition and build for the future.

Slim down the fat words and focusSo many trends are defined by ‘fat words’ – phrases that seemingly encompass everything but mean very little. Take, for example, artisan. What was once reserved to food markets and indie stores has now been taken up by big business, with the likes of Costa and McDonald’s incorporating ‘artisan’ options into their standard offerings.

Innovation has become similarly ‘fat’ over time, and is used to cover a multitude of activities, but there are few true innovators in the brand world. Innovation is about building on what you have, but also not being afraid to go against the flow. True innovators aren’t afraid to strip down and rebuild. In popular culture, Lady Gaga is a prime example of true innovation. She initially shot to fame with an extreme wardrobe, structural hair and electro-pop sound, which became increasingly extreme (remember the meat dress)? But as her following and influence in the music industry has grown, Gaga has shed the shock factor to instead focus on the messages behind her music. And while she may still make the biggest impact on the red carpet, she’s not afraid to be seen in a simple tailored dress, because her brand is so strong, as she is always true to the values that her brand has been built on.

Being un-afraid of your competition and their values ensures true innovation in even the steadiest of industries. By adopting changing customer behaviour Aldi and Lidl have become mainstream alternatives to the big four, after years of being seen as inferior discounter choices, with well-established FMCG brands being forced to respond aggressively to a very real threat.

In such a climate, no business can afford to rest on its laurels. Whatever your market and position within it, innovating is essential to stay ahead of – or even keep up with – the pack. Innovation can’t be a project however; it has to be central to your culture and strategy and something that’s constant as

well as reactive.

Once a giant of the high street, House of Fraser has recently fallen victim to a lack of sustained innovation, with rumours of at least 31 of its 59 stores facing closure, or at the very least, a significant reduction in floor spacei.

Many commentators claim the crisis is the result of the chain failing to shift its focus to online shopping, partly as a result of the long-term leases historically taken out by high street retail stores. And while other retailers have looked to rationalise their space and find alternative uses for part of their footprint, such as gyms or hot desking spaces, House of Fraser has failed to change its course.

Innovation on this scale can be daunting, which is why your business may have to adjust its mindset and wider culture to lead the way. In short, you can’t be scared to fail – particularly when the alternative is the kind of crisis House of Fraser finds itself facing now. Successful brands take risks – sometimes they hit the mark and sometimes they fall flat, but what they learn from such failures only fuels the fire.

Coca Cola are a prime example of a brand built on constant innovation. Their secret? Innovation is always relevant and focused on building brand advocacy and is central to their business model. There are five areas of focus for innovation – product, packaging, marketing, consumer relationships and systems – providing opportunities for revolution, evolution and small moments of brand experience, all linked to their mission of ‘refreshing the world’ ii.

From personalised labels to pop up beach bars that sell Coke in bottles made entirely from ice and attachments that turn empty bottles into useful tools in third world countries, Coca Cola looks at innovation through a variety of lenses, from ‘life-changing’ to ‘moments of joy’. Placing innovation at the heart of its business has been central to maintaining its market position for the last 130 years.

Innovation doesn’t have to be at the forefront of your PR agenda either. Many big brands innovate constantly, keeping their efforts under the radar and letting the enhanced experience their efforts create work quietly to nurture loyalty. If you asked the average person to name an innovative brand, McDonald’s probably wouldn’t top the list, but the brand is constantly looking for new ways to stay ahead. For example, introducing quality coffee targeted at the more functional, value-focused coffee drinker, supported by a targeted advertising campaign taking the snobbery out of coffee drinking sparking reports that McDonald’s is starting to eat in to Starbucks’ salesiii. Brands should be constantly searching for the latest insight to keep them relevant, rather than focusing on innovation that drives PR or creates a short-term uptake in consumer ‘likes’.

McDonald’s manages innovation by keeping the core base of its business the same, but tweaking product, service and experience in a way that doesn’t disrupt the customer experience but challenges them to reappraise and reconnect with the brand on a regular basis. For example, a recent switch to table service in some outlets is a minor change to procedure but generates a major buzz for the brand.

There’s an element of humour and self-deprecation there too; McDonald’s may not be a fancy meal out, but when it’s what you want, you might as well do it in style.

You don’t have to be a global corporation on the scale of Coca Cola or McDonald’s to use innovation to lead however. High Street convenience chain Eat 17 is showing how incremental innovation focused on consumer demand can help your brand stand out in a saturated market.

Since opening their first neighbourhood grocery store in 2006, they have opened four hyper local stores, each with their own distinct look to reflect the character of the location. Their food is sourced from local producers, with bespoke ranges by store to appeal to a focused demographic, with home-made meals, bread and treats on the menu. Eat 17’s portfolio is slowly growing, offering a credible alternative to supermarkets’ convenience offers that appeals to the more responsible, sustainably-focused shopper. It isn’t a business model designed to take over the world, more to slowly change it with innovative products and service its founders are sure its customers want.

Eat 17’s model is a good example of moving from a linear approach to a more cyclical focus, captured in the Sun Branding model of ‘relevance’, ‘responsibility’ and ‘rediscovery’. Innovation isn’t a single stream; it covers multiple threads and can be a huge investment or a minor tweak that sets you apart from the competition and keeps the attention and loyalty of your consumers.

Becky Fone, innovation director at Parker Williams, the design arm of Sun Branding Solutions

“We should approach loyalty as ‘retention of attention’ to keep ourselves constantly in tune with our consumers.”

Underestimate the competition at your perilIt’s a much-quoted cautionary tale – the video rental company Blockbuster and its failure to see the threat digital posed to its business. But there’s more to Blockbuster’s downfall than its refusal to acknowledge technological change. The business was founded on making money from customers’ non compliance (charging late fees on films); a firm built simply on making money, not on making money by giving customers exactly what they wanted. Innovation was simply not a priority and they didn’t take the potential threat posed by their start-up competition seriously.

Blockbuster didn’t build on a real brand truth of ‘entertainment’ says Parker Williams’ innovation director Becky Fone.

In fact, it was reported that Netflix founder Reed Hastings proposed a deal with Blockbuster CEO John Antioco in 2000, where Netflix would promote Blockbuster’s brand online in return for Blockbuster promoting Netflix in its stores. Antioco refused and within a decade, Blockbuster was bankrupt, with Netflix now worth an estimated $28bn dollarsiv – 10 times what Blockbuster was valued at in its heyday.

“They focused on what they produced rather then what they created - a great Friday night, and failing to understand something so central to their brand.”

Start behind yourself to get aheadWith so many disruptors entering the market, it may seem as though innovation is all about ripping up the status quo and trying something completely new, but that’s rarely the case. Established brands can innovate based on what they already do, and while it’s important to keep an eye on trends, it’s also important to remember that trends are, by their very nature, transitory, so it’s important not to ‘trend-surf’ but to give a subtle nod to them without losing sight of who you are and where you eventually want to get to.

Being the first to move is a scary proposition for any business, especially if leading the way on innovation means an increase in cost to the end consumer. Product and packaging innovation in particular categories can stand still for years as risk-averse brands hold their ground, for fear of losing share.

But brands that are willing to take a risk can reap great rewards, as long as innovation is a way of life, not just a one-off project. Even the most innovative ideas can lose momentum if left to their own devices for too long.

Take The Body Shop, still trading more than four decades after it launched. When the brand launched in 1976, founder Anita Roddick’s focus on ethical sourcing, natural ingredients, fair trade and no animal testing was years ahead of its time and gave the brand a clear identity and ethos that directly targeted its tribe. But while the business has survived and still maintains a High Street presence, its original ethos has become diluted in a market where every beauty brand wants to present an ethical beauty ethos. Perhaps the main cause of its static status was its sale to L’Oréal in 2006 for £652m – a move that many claim undermines the brand values Roddick built her business on and dilutes its ethical message.

“Without Anita Roddick, The Body Shop brand slowly lost its way, being considered by L’Oreal as just another high street retailer rather than its origins as a progressive, thought leading brand. Perhaps its new owners, Natura Cosmetics, will refine the brand as an outspoken campaigner for environmental concsciousness and sustainability, producing game changing innovations once more.”

Simon Gore, managing director at Parker Williams, the design arm of Sun Branding Solutions

Innovation is dependent on being clear on what you stand for and focusing any change you make on delivering more for your customer and your brand. It can’t be solely a reaction to action from your competitor or a way to deflect media or public pressure. Stay true to what your brand stands for, and what matters most to your customers.

In 2017, Pringles was named as the number one offender in terms of recyclable packaging due to the multiple substrates used in their packsv. However, the majority of crisps are packed in metallised bags to keep the product fresher, meaning the whole category is just as bad, says Gillian Garside-Wight, packaging technology director at Sun Branding Solutions.

“Packaging innovation in the snacks category is limited as brands balance their desire to act sustainably with the need to keep their products fresh and maintain an acceptable shelf life,” she says.

“Pringles packs and their whole brand identity was borne out of an innovative approach to snacking, focusing on sharing and the occasion rather than just the product. Sharing occasions are growing in importance to consumers, but few crisp brands are catering to this, because there’s a risk in being the first to go.” says Gillian Garside-Wight.

The lesson here is to take a balanced approach to innovation, not simply to focus on one area. Pringles could improve recyclability but would need to balance this with the consumer experience and maintaining brand recognition.

It’s also interesting to consider that Pringles weren’t actually the first crisp brand to use the tube format – Stackers launched first but failed to build on their product and packaging innovation with marketing the way Pringles did. By focusing on the feelings and behaviours embodied by its ‘once you pop, you can’t stop’ campaign, Pringles secured the market-leader spot, proving that looking at your product and brand through a variety of lenses is vital to ensure that innovation sticks.

Innovation can also support the long-term development of your brand through testing and data collection. For example, many commentators claim Amazon’s pilot AmazonGo stores – physical spaces where products taken off the shelf are added immediately to your online Amazon basket – are actually a way of driving loyalty to its Amazon Fresh and Amazon Dash offers, collecting the data on shopper behaviour that delivers a more convenient way of shopping wherever you are.

Innovation can also help you to mitigate risks and costs created by outdated operating models. Walmart is trialling its hybrid Seiyu store in Tokyo, using one location to serve both physical and digital shoppers. One floor features a traditional store, with a ‘dark store’ on another, to ensure delivery of online orders doesn’t disrupt the in-store shopping experience. This helps streamline processes and give a clearer view on stock, whilst making the most of the retailer’s existing estates and creating valuable insights into real-time customer preferences.

This multi-stranded, cyclical approach is captured in the Sun Branding model of ‘relevance’, ‘responsibility’ and ‘rediscovery’. Innovation isn’t a single stream; it covers multiple threads and can be a huge investment or a minor tweak that sets you apart from the competition. Working with partners or in co-operation with interested parties can spread your risk.

Dont’t be too proud to collaborateSometimes innovative ideas don’t get off the drawing board because bringing them to life isn’t feasible, technically or financially viable. It was an issue that Coca Cola encountered when developing its PlantBottle, which looks, feels and functions like PET plastic, and is fully recyclable, despite being made from up to 30 percent renewable, sustainably-sourced plant sugars.

As with any new product or technology, production volumes can be a barrier, making tooling up and production runs too expensive and adding excessive additional cost for the end consumer. So, instead of keeping PlantBottle to itself, Coca Cola joined forces with Heinz to create the volume needed to keep production prices at a manageable level.

Both businesses are focused on reducing their carbon footprint, and instead of thinking as rival consumer brands, capitalised on what aligned them to innovate in a way that makes sense to both brands.

And a life-cycle analysis conducted by Imperial College London showed that the use of PlantBottle resulted in a 12-19 percent reduction in carbon impact. Plus, in one year alone, PlantBottle packaging eliminated the equivalent of almost 30,000 metric tons of carbon dioxide, or 60,000 barrels of oilvi.

Sources

i - https://www.bbc.co.uk/news/business-44394948

ii - https://www.coca-colacompany.com/innovation

iii - http://uk.businessinsider.com/mcdonalds-eats-into-starbucks-sales-2018-5

iv - https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-whyblockbuster-really-failed-and-why-it-didnt-have-to/#7c5882861d64

v - https://www.sunbrandingsolutions.com/news-and-views/singling-out-pringles-wont-encourage-lasting-change/

vi - https://www.theguardian.com/sustainable-business/gsb-network-collaboration

Get in touch

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At the heart of Sun Branding Solutions is a team of brand, innovation and packaging experts, drawn from five different specialisms but with one shared focus; creating the very brightest ideas for brands.

Each team, whether it’s strategic design, pack science, graphics, legal or digital, is brilliant in its own right, and you can work with one, two, or as many as you need to get your big idea off the drawing board and into your customer’s shopping basket. But it’s when the teams come together that we’re at our very brightest.

Our experts’ combined experience and insight, gathered from many years working with big name brands and retailers, is what shapes the way we work - with our clients and with each other.

Because even if one specialism isn’t directly working on your project, their insight and knowledge of your market has gone in to shaping what we deliver, and how. That means more creativity, more innovation and more for your money.

Our experts are brighter together, and with them on your side, your brand will shine brighter too.

For more news, views and insight, go to:www.sunbrandingsolutions.com