Sometimes Innovation Means Identifying what Consumers Don’t Need
Posted: March 23rd, 2009 in Addressing Consumer Needs
A lot of people seem to think that innovating in times like these should be the least of their concerns. After all, who has the luxury to think about new products and services when the economic climate is so grim?
Those who subscribe to this view argue that they simply can’t afford to be innovative given a contracting economy and fear of the future creating a constant check on business aspirations. A number of defensive positions are taken: 1. Innovation is a high risk game that looks a whole lot riskier when the future is so uncertain; 2. Pocketbooks are shrinking– who’s buying new or better when even the basics are less affordable?; and 3. Our budgets are shrinking - why invest in innovation and R&D when the core business is at risk?
Staying innovative is essential not just to future growth but sometimes – these times - to simply surviving within the present. And an innovation mindset must continue to inform strategy and drive change, particularly when weathering an economic downturn.
Though innovation often appears to be something of a gamble, it does not necessarily mean churning out new products or services or adopting new processes at high cost and heavy capital investment. Rather, it means responding intelligently to the needs and desires of existing consumers, being savvy toward the wider marketplace, spotting trends, and having the capabilities in place to pounce on opportunities before they are detected by competitors. Being innovative is, in other words, simply good business.
And while innovations - the real, touchable kind with specs and edges and new to the world stuff like smart features and sexy packaging, the kind backed by prototypes and pro formas – while these are the inevitable result of a company committed to understanding market needs, sometimes being innovative means being sensitive to what consumers don’t need. Take Hyundai, which found that rebates and other conventional sales incentives have little impact on car shoppers in the present economy and that their single concern is making payments. In response, Hyundai launched a program in January that allows buyers to return their car if they lose their job within the next year.
Recession, like any sweeping change in consumer behavior, does not mean putting innovation on hold. It means redistributing talent and resources around new opportunities. The companies that will emerge in today’s economy as the most innovative will certainly be those that discover ways to crack consumers’ reluctance to spend. They may also be those that acknowledge the need for fewer products, not newer products.
http://money.cnn.com/2009/01/05/autos/hyundai_assurance/index.htm