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.
Kristine Urea of Market Performance Group commented on this from a product innovation viewpoint, in the “Adapting Your Products” session of our Deinvest to Reinvest Virtual Leadership Summit.
“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 Ideoclick helps brands build velocity on Amazon, connect with us here.
Get on Board or Get Left Behind
With an unprecedented event like the COVID-19 pandemic, no universal playbook exists to guide companies on how to resume, reinvent, or reinvigorate operations. Everyone is maneuvering as best they can, but it’s now time for companies to take a hard look at their go-to-market innovation strategies.
At the heart of that is innovation. In this installment of our “Deinvest to Reinvest” Virtual Leadership Summit blog series, we return to moderator Thom Blischok of The Dialogic Group and panel members Anne Zybowski of Clorox, Jim Norred of Microsoft for Walmart, Patrick Spear of GMDC, and Bill Campbell of Premium Retail Services.
Old-School vs. New-School Approach
COVID has changed everything. It is critical that companies leverage current and emerging technologies to rise to customer expectations, as well as shift processes relating to the supply chain.
Anne Zybowski of Clorox illustrated this shift in terms of moving from old-school economics to new-school economics, and why it’s important to “lean in harder” to e-Commerce as part of a deinvest-to-reinvest strategy to address go-to-market innovation.
“We have to think hard about where some of our traditional monies and efforts at the intersection of retailers and CPGs have gone, as well as how we communicate and engage with the customer. The old economics forced us to think that we could move consumers into channels, but now people are going to whatever channels they can,” she noted. “We fundamentally need to revisit the old [economics] and look at how we can reinvest more into digital, because that’s the way we’ve connected.”
Patrick Spear of GMDC discussed how many manufacturers are considering a streamlining of product lines. As an association that serves both retailers and suppliers, GMDC witnesses shifts from a retailer’s perspective, predicated on consumer demand—but also from the suppliers’ perspective in terms of demand shock and the supply chain.
“There’s the necessity right now to think differently about product assortment and where [companies] are putting the focus, just to meet near-term consumer needs. I think this is going to be a lasting trend,” shared Spear.
Technology in Action
Bill Campbell of Premium Retail Services provided three examples of technology in action. “We are overhauling our digital and commerce strategy with a heavy focus on virtual reps, which I think are going to get big in the future, online brand champions, and then trying to position ourselves to help with online order/pickup at store initiatives. Second, we have to hyper-focus on reducing costs so we’re ready for the future. And lastly, trying to ready ourselves for retailer shifts—including [retailers] outsourcing more operational responsibilities so that we’re ready when they’re ready.”
Bringing the Store to the Customer
Looking at the progress of technology integration into the shopper’s experience, Jim Norred of Microsoft for Walmart, stated that the COVID-19 crisis has drastically changed shopper expectations. This evolution requires re-imagination from the inside-out, as it relates to considerations like digital storefronts, order fulfillment, auto-replenishment, dark stores, micro-fulfillment, and home delivery.
“If [customers] can’t come to the store, you have to start thinking about ‘How do I bring the store to the customer through digital experiences?’ There’s been this topic around contactless shopping, but that’s really now frictionless shopping. Shoppers will be loyal to the brands that can deliver on these new experiences the way they want,” advised Norred.
Addressing Health & Hygiene
Also factoring in to the shopping experience—and shoppers’ expectations—is the component of health and hygiene. Spear spoke about this in terms of micro-fulfillment centers (MFCs), which he says “are coming.”
“How we think about front-end contact-less, frictionless, in the future—but also what role innovation and technology plays around health and hygiene. Not just for the store associates, but also the customers.”
Part of this involves the exploration into “COVID certification” to ensure hygiene and sanitation—and where that might be implemented as companies move forward. “If you have lead certification for a building, why couldn’t you have COVID certification for a restaurant, or a bar, or a distribution center? If there are policies and protocols you could follow to ensure [safety], from a standpoint of being a great place to be an employee, or a great place to shop, COVID certification would be relevant,” added Spear.
Why Working from Home Is Much More than “Convenience”
Norred expanded upon the technology aspect from a slightly different operational perspective: working from home (WFH). After 25 years working with retailers and CPGs that haven’t supported WFH, he avers the mentality that “work from work” as a superior way to conduct business is waning.
“That’s simply not the case today. I think technologies like Teams and Zoom or other collaboration tools are enabling [WFH], and I think you’ll see it more and more from traditional companies. It’s one of those things that can help drive costs down, because you don’t need the real estate anymore.”
Norred also noted that many companies are realizing how employees are proving to be more productive in a WFH environment.
Disrupt, Disrupt, Disrupt
All panelists were staunch that the approach of “wait and see” is not an option.
“Companies will have to begin creating and dedicating efforts to disrupting their own business models. Creating truly differentiated consumer experiences and operating models that let them compete versus waiting on [the pandemic] to be a forcing function,” stated Norred.
Without a concerted effort into innovative solutions across the board, businesses will unfortunately be left behind. “We think about innovation three ways: products, service, technology. You can’t have one without the other,” advised Spear.
As the COVID-19 pandemic continues to impact the way retail businesses operate, one component in the crosshairs is the customer experience (CX). In our recent virtual leadership summit, “De-Invest to Re-Invest,” Kevin Coupe of Morning News Beat brainstormed this topic with Beth Stiller, CEO of Massage Envy, Gwen Morrison, former CEO of WPP’s Retail Practice—The Store, and Meri Guylan, Executive Experience Strategy Director for Left Field Labs about the future of retail’s CX.
From in-store shopping capabilities to the safety concerns of a service industry like Massage Envy, all three provided insightful views into what patrons can expect in the coming months—and potentially years.
Pivoting Processes, Not Core Values
One powerful statement made by Stiller was that Massage Envy won’t be reinventing their core service—nor their core values. What will inevitably change is how patrons experience that service.
Even prior to the pandemic, the company was exploring options like contactless check-ins, virtual intake forms, and the way users paid for their massage services. “There’s nothing like an unprecedented experience such as this to ‘supercharge’ your plans and force you to move quicker—when you already thought you were moving quickly,” she shared.
Going forward, the company will continue to mitigate challenges of reopening their 1,150 locations, keeping safety the main priority—for both the customers and the therapists and estheticians. As of the summit, approximately half of the locations had opened for business, but all were ready for the green light.
How Safety Factors into the 3 Pillars of CX
Left Field Lab’s Guylan weighed in on the issue of safety as well, having worked with several brands that maintain brick and mortar locations. In the context of safety, which she avers is the number-one priority of most retailers, customers will maintain a focus—and ultimately rate their experience—on the three pillars of convenience, value, and communication.
However, there is an element of “forgiveness,” or patience, that most shoppers are willing to grant as everyone tries to navigate the new normal. “There are some things that changed for the negative, and some areas where there’s an opportunity for us to try new things. Because everybody knows we don’t have the answer. No one has the answer,” stated Guylan. “There’s a forgiveness they’re allowing, and so brands are able to play in a space that they weren’t able to [previously]. Everyone is experimenting and open to new ideas.”
An Opportunity for Retailers to Spread Their Wings
An element of experimentation is looking at customer experience from an in-store shopping POV. Will physical associates be needed, or might virtual associates suffice? With advancements in the retailer technology space, there’s ample leeway to play in the sandbox.
In Morrison’s words, it’s a time for companies to “spread their wings.” Some capabilities won’t work going forward and they’ll have to be left behind. Others will need to be reimagined. The rapidity of innovation, essentially three years’ worth in a span of three months, presents a promising opportunity for retailers.
Unfortunately, there’s one key CX component that will require ingenuity and creativity: recreating that sensory-stimulating, idea-generating feeling shoppers get when browsing in-store. This typically doesn’t apply to everyday purchases that have long been given over to the online experience (toiletries, groceries, household goods, etc.). But, it is an area that deserves a novel approach given the current circumstances.
Despite Everything, It All Comes Down to Community Engagement
When the pandemic started to really take hold, all across the globe, Morrison observed an interesting trend. Businesses started to evaluate and shift their capabilities—not only taking into account the experience of their customers, but more importantly their communities. For example, McDonald’s locations in Australia recognized the opportunity to distribute key essentials such as bread, milk, and flour via the drive-thru.
“Retail is always at the heart of a community. They’ve touched people. They can see what’s going on in their neighborhoods. That’s just one example of being really ‘nimble’ in shifting and identifying what you have and what you can do differently,” she noted.
So, Where Can Retail De-Invest (At Least for Now)?
Given the theme of the summit, each panel member had an idea of what retail, in general, can do to de-invest. Morrison’s idea is one most everyone can get behind in current times: axing the Sunday print circular. “We’ve seen promotional cadence change so much during this pandemic. FMCG brands are hesitant to be promoting certain price points as they usually do because of the risk of being out of stock. Everything is being reconsidered in this particular area.”
Guylan expressed her opinion of how in-store browsing will shift, with retailers featuring fewer items on shelves, perhaps fewer (or virtual) associates. “The entire browse experience is going to change.”
Stiller’s input revolved around processes and how the big, complicated pilot of a new idea will need to be simplified—something all four parties wholeheartedly agreed upon. “We’ve learned to be nimble over the last few weeks, and we need to carry that forward.”
You can view the full panel discussion here.
This recent article in Fortune Magazine by Jen Wieczner is a deep-dive into the how the TP manufacturing and supply-chain model, combined with the panic buying around COVID-19, created the weeks-long empty shelf situation within digital and brick and mortar retailers alike. Featuring data and insights from industry experts including Ideoclick’s Andrea Leigh, it’s an interesting read that may just inspire you to make some preparatory changes to your own organization.
We recently hosted a virtual leadership summit, “De-Invest to Re-Invest,” which focused on the unprecedented business transformation challenges companies are facing amid the COVID-19 crisis. Clients, partners, and friends in the industry came together to share insights and expertise for not only managing change during this time, but actually driving change.
Justin Leigh, Ideoclick’s CEO, opened the summit with some enlightening—and hopeful—remarks. “Despite all of this change and uncertainty, there are trends. And if we listen to each other, we can start to see what tomorrow will look like. You’re in more control than you think,” he assured. “We’re all designed to survive. Creativity rises from limitations. Right now, we’re seeing creativity blossom in new ways all around us.”
Each session of the summit provided critical observations about what is happening within industries currently, and what is expected to come. In the upcoming weeks, we’ll be sharing a series of blogs covering all of the topics discussed.
To begin, we turn to The Dialogic Group’s Thom Blischok, who shared findings on how C-level executives are making (or should be making) business adjustments during the COVID-19 pandemic.
Operating in the Now
Blischok’s presentation was based on conversations with approximately 40 C-level executives (retail, CPG, distributors, and service providers), who are in the depths of the pandemic’s fallout. Instead of focusing on future solutions, Blischok urged companies to consider our current state.
“Looking at the market today, you see hundreds and hundreds of story lines about ‘what’s next.’ This de-invest to re-invest story is about what’s now.”
One concerning revelation that came out of the conversations with executives was a clear disconnect between ongoing concerns and their overall prediction for operating in the new norm.
- 50%+ expressed concerns about future survivability in their current form
- 60%+ believe their organizations lack the skill set to compete in the future state
- 71% indicated they must radically improve and/or simplify organizational and operational decision-making
- 74% do not think their organizations can adapt quickly enough to a rapidly changing future state
And yet, 91% believe they will be able to compete and grow in the new normalcy. How does that compute?
Upon digging deeper, Blischok and his team began to understand the opportunity for a different kind of leadership, post COVID-19.
3 Key Initiatives to Implement Today
From Blischok’s research, three key initiatives emerged—particularly in light of the fact that despite the thousands of predictions, we are still very unclear about what the future state holds. Those three initiatives are:
- Cash Conservation: managing cash is going to be critical to adapt going forward.
- Modernization of the Operating Model: the current structure of organizations will not sustain itself in the coming months (and years).
- Competing in a New Landscape and Partner Ecosystem: in this new ecosystem, you don’t have to own everything; you don’t have to buy everything.
Ultimately, Blischok and others’ recommendation is to de-invest 30-35% of infrastructure, legacy systems, and processes and apply a 15-20% reinvest to become a much more competitive and financially successful organization.
Time Is NOT Your Friend
Looking at consumer behavior, workplace protocols, and retail operations, it was clear that all will experience lasting change to some degree. Several “traditional” behaviors and habits are forever altered.
The consistent thread throughout all of Blischok’s analysis was this: time is not your friend. In the next 30, 60, 90 days, organizations should be planning both best-case and worst-case scenarios. They need to be modeling ongoing cash needs for both operations and investments. Finally, organizations must begin an organizational and operational transformation to a new, streamlined operating model.
“This is not a plan for panic, and it’s not a plan for survival,” stated Blischok. “It is a plan for real and profitable growth.”
As a search marketer on Amazon I have had a front row seat to the changes in consumer behavior through COVID-19. Watching the changes in search volume and ranking is always interesting but watching items like “N95 mask” and “toilet paper” become the top searches on Amazon has brought more of a foreboding than the usual curiosity.
Well, yesterday I got to see something positive begin to trend in Amazon search ranking. As of Saturday 4/4 “Sewing machines” have become the 27th most searched term on Amazon. Back in January it was 591 and as recently as March 19th it was 597. The initial rise in ranking seems to be tied to DIY instructional posts and videos like this tutorial from Erica Arndt – https://lnkd.in/eQT9n5V
The most recent surge in search rank can be matched with calls for supply donations to hospitals and first responders. America’s new favorite news source, SGN (Some Good News) highlighted how companies and people are answering the call https://lnkd.in/eTekg7y
This virus has brought so much harm and negativity that I feel it is more important than ever to show these bright spots when they appear.
Post by David Quesenberry, a marketing director at Ideoclick and specifically an Amazon marketing expert working to help clients strategically plan their marketing efforts.