Historically, consumer goods innovation has taken two main forms. Companies have established innovation arms to develop new products and services to penetrate new markets. Or they’ve acquired brands to access innovation and new business models.
But today, we are entering a world where whatever consumers want is communicated instantly and gratification is expected immediately. It means the innovation strategies of the past hold less sway for a company’s ability to achieve relevance at scale to a marketplace of millions of individuals.
All this means innovation is now about the “how” just as much as the “what.” So hyper-personalization and on-demand fulfillment become just as important as dreaming up ever better mass-market products.
In fact, according to our recent study, 87% of leaders agree that customization and on-demand delivery will be the forces behind the next big wave of competitive advantage.
We’ve come a long way from traditional product-focused R&D. Just look at Beam Dental’s smart toothbrush. It tracks usage and offers personalized advice on improving customers’ dental hygiene. It can even be used to lower premiums on the company’s own dental plans.
Atolla Skin Lab Solutions, meanwhile, uses a specialized database in conjunction with a machine-learning algorithm to develop a data-driven skin serum so consumers get their formula adjusted to their special, changing needs each month. Atolla is working on a smartphone app to create an automated feedback loop that will allow the brand to learn and make adjustments from every interaction with the consumer.
Successful brands will be those able to sense and identify shifting consumer needs and behaviors before the competition -- and potentially even before consumers themselves. That means owning the direct channel to the individual and using a wealth of data points to understand and predict behavior.
Technology experimentation is critical to this, and brands should be exploring every possible tool in the digital toolbox. Specifically, that means understanding how distributed ledgers, AI, extended reality and quantum computing -- the so-called “DARQ” technologies -- are going to fundamentally change what consumer brands do, and how they do it.
The good news is that almost nine in 10 industry executives say they’re already experimenting with at least one of these technologies.
In fact, all consumer brands must be ready to draw on a new set of capabilities to provide the sources of insight and inspiration they need to innovate in the post-digital era.
Future innovation will require a workforce fully comfortable with and immersed in digital technology. Leading companies are already adapting to this new reality, establishing workforce models that integrate their best employees and on-demand freelance resources with intelligent machines.
Forward-thinking consumer brands recognize we’re on the cusp of an entirely new era -- one in which baseline consumer expectations are continually raised higher and higher. To keep up, brands are rethinking what innovation means and using it as a lever to push their brands to new heights of in-the-moment consumer relevance.