Ready To Innovate?

I think IBM spots were the first to boastfully claim that when you were "ready to stop talking about innovation and start doing, then call us." That was in 2006, if my memory serves me correctly.

A strong sentiment, no doubt, but one I'm not sure has caught on entirely even now, several years later. Nearly every meeting I have with clients includes a discussion on how we all need to be more innovative — but not many of them have a plan outlining why they want to innovate or what they want to innovate, nor do they have any funding to actually achieve innovation goals.

If we are truly moving to a brand-building mentality as private brand developers and marketers, then we need to face some realities in the way we do business today as it relates to innovation. We've been fast followers around so many parts of the store for so long that we need to rethink virtually everything about our business models, our growth strategies and our operations if we are to become true innovators.

Following national brand line extensions with new flavor profiles or introducing new pack sizes that meet a specific calorie count or are shaped to "look like the brand" might continue to provide private brand marketers with share and margin increases, but in my opinion, such efforts will not push you beyond the ceiling of standard private brand share (the U.S. national average is approximately a 17 to 18 percent share). Before we can even begin to hold a candle to the finest private brand innovators and marketers in the world, we must invest the time, effort and money needed to:

• Do our analytical homework to focus on the consumer dynamics of the market and the category.

• Develop a brand strategy and portfolio architecture that both satisfies our consumer targets' need states and differentiates us against our competitors.

• Create a pipeline and culture of innovation that rewards failure as much as it does success — and budgets the proper investment to do so.

Collaboration might be the single most important thing to think about when discussing your next innovation. Collaboration is obviously one of the keys to successful brand-building, but have retailers always included their supplier-partners in their innovation discussions as they are happening?

When the manufacturer and brand owner are one and the same (as with most national brands) this is something that is done on an ongoing basis. The R&D investment of any innovation needs to be taken into account when determining the ultimate ROI of that innovation.

But, as we often see, many retailers that come up with an innovative idea for a new product find out months later the supplier-partner with which they have chosen to work has been put through two re-bids of the category over the past two years — and has absolutely no dollars earmarked for innovation in that category for them. Collaboration earlier in the process, with a supplier-partner that is willing and able to invest while you are shaping your innovative concept, will go a long way toward getting that concept realized and on shelf — making money for both of you.

Ultimately, the best collaborations in relation to product innovation will be reflected in the product's packaging and in marketing that differentiates that product on the shelf — providing the consumer with a reason to try it. All of the mechanisms in place should be a composite of the collaboration that started the process and the innovation that ultimately leads to trial, repeat purchase and loyalty.

Glenn Pfeifer is vice president of Daymon Design — a branding and packaging firm that has been bringing private brands to shelf for food, drug, mass merchandiser and specialty retailers around the world since 1980. Contact him at [email protected].

We've been fast followers around so many parts of the store for so long that we need to rethink virtually everything about our business models, our growth strategies and our operations if we are to become true innovators.

Collaboration might be the single most important thing to think about when discussing your next innovation.