Brands are perpetually innovating to keep up with the wants and needs of consumers in order to improve lives in real and meaningful ways. Yet, innovation can be broken up into three categories: breakthrough, platform and incremental.
Incremental innovations are the logical next step for your products or brands and instrumental in keeping them up-to-date, while breakthrough innovation are generally higher impact, less incremental, and oftentimes more costly. A breakthrough innovation that makes it big can put your brand on the map for life. A platform innovation is somewhere in between and introduce new products to grow market share and divert consumers away from competition.
But is breakthrough innovation right for everyone?
An example of breakthrough innovation would be Nestle’s Nespresso system, a groundbreaking and interesting way to prepare quality coffee products. The system is comprised of the Nespresso Machine and different flavored Nespresso “pods” that are portioned and individually wrapped for one-time use. At its core, Nestle was simply serving espresso in a new format, but the way it was prepared was radically different and what made this innovation a big hit. Consumers were wowed by the ease-of-use of this product, the freshness of the espresso, the variety of the flavors, the way it was packaged and so forth.
Though the Nespresso system was an overwhelming success, high-impact and breakthrough innovations do not occur very often, nor are they a big hit all the time. Innovations such as this one take longer to plan and develop. They require companies to spend considerably more money for commercialization. Moreover, it’s a fact that consumers, as a whole, shy away from breakthrough innovation—especially if the benefits have yet to prove themselves. Thus, breakthrough innovations require a strong marketing spend to properly articulate the new functionalities and value proposition.
Product & Brand Managers generally consider breakthrough innovations high risk. On the other hand, if this breakthrough innovation hits, it may provide first mover advantage or technological leadership—two very noteworthy marketing accomplishments. But is it always worth the gamble, especially when incremental innovations are less costly and more widely accepted?
An example of incremental innovation is Quaker Oats’ evolution from a cylindrical tube to individual packets that were portioned, portable and easy to store. Though this innovation may seem minor, and is incremental in nature: it dramatically raised user convenience and diminished waste; therefore adding important benefits for the consumer. Needless to say, it was a big hit.
Incremental innovations, while not as glamorous as their radical counterparts, can be drivers of growth in their own right, but is generally much slower. According to a recent study by Accenture, Consumer Packaged Goods companies are spending half of their innovation budgets on incremental. This has a downside, as many companies get stuck innovating solely incrementally, and never push the envelope or do something really groundbreaking. When innovating incrementally, there are a few guidelines you must adhere to. Consumers prefer that incremental innovation represent more than just cosmetic changes. And if they are cosmetic changes, tell them how this change is beneficial:
Does it allow you additional storage for the product?
Is it more portable, more environmentally friendly?
How do these innovations make life simpler, or better?
Everyone should focus on innovation, whether its incremental, breakthrough or platform but don’t get stuck skewing all your innovation in one direction. Breakthrough innovations are just as necessary as incremental ones. In today’s market, where brand loyalty is measured in months, not years, and where copy cat brands are price slashing and hyper competing, brands that do not actively invest in innovation and perpetually further their value proposition cannot survive. If you always focus on incremental innovation, you are always “trying to keep up.” Invest in some higher risk innovations that allow you to stand out from your competitors. Customer retention relies on this innovation. While innovation is not always a shoe-in and may not be lucrative, the alternative is not viable. To compete and even get ahead, brands have to continually serve the evolving needs of their consumers, and be able to perfectly articulate this innovation and value advantage over the competition.
Amina AlTai is the Marketing Director for the Imagemme New York City office.