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On the types of innovation

When one thinks “innovation”, the first names that come to mind are Facebook, iPhone, iPad or even Google. These brands are on the top of mind awareness of pretty much anybody in both developed and developing countries. They have managed to generate significant awareness and usage incredibly successfully. Beyond the fantastic sales and profits they are generating, they have also deeply changed the way we live in a relatively short period of time.  And they are admired for both.

When one thinks about these innovations, one may notice that they all share the same features: a new technology, a smart consumer insight, a new category, and an appealing communication strategy.

And indeed for most people innovation is one of these: game-changing innovation. Nespresso or Swiffer, to a lesser extent, have been similar at the time but without the extra online buzz.

Needless to say that today the amount of online buzz is a huge driver of hype on the latest game changing innovations like the iPad. It seems that generating a high share of buzz is a key to success in a more connected world. Facebook, Apple and Google have managed to get the online cut-through very well, which fueled their rapid growth.  The online buzz may be easier to get for high-tech/internet linked innovations. This explains their fast diffusion; prime prospects are the heavy web users who will be more likely to generate high levels of online buzz, which is in turn more and more rapidly relayed by traditional media. Traditional media reach and typical new product diffusion curves will explain the rapid growth of adoption of these innovations.

Our attention has been rather tantalized by these innovations; we are now seeing the emergence of a collective imagery that innovation is limited to those game-changing innovations. No question, Facebook or the iPhone are by far the ones with the greatest impact on our society. But hey, are there only so few innovations per decade in this world?

And the answer is no, of course. Despite the significant number of new technologies and new products introduced in these markets every year globally, most people will struggle to see much innovation, if any, in more mature categories such as laundry detergents or household cleaners. True, the level of buzz is low on these categories. Most of us are probably not involved enough in these categories to even see the new products on the shelves. Only a handful of very involved consumers may see these new products as very innovative. Some other consumers are keen on new products to satisfy their need of variety, yet it does not mean they perceive these products as innovative.

We could say the following: it takes game changing innovation to make the majority label it “an innovation”, newness is important to some consumers, but the two things are clearly different.

Marketing and FMCG professionals will generally assess the innovation in the light of both its technological newness and its translatability into new or improved communication. Ideally, a technology is genuinely new and delivers a tangible consumer benefit that can be easily translated into clutter-breaking communication. However, in practice, a new technology does not necessarily provide a noticeable consumer benefit, and a new technology is not necessary to communicate a new benefit to consumers. Between the ideal scenario and the absence of technical or commercial innovation, there could be a continuum to depict the realm of possible innovations on some sort of “newness scale”.  The paradigm is that generating a high level of newness in these categories can command a premium or limit commoditization.

Luxury goods differ somewhat. Some of these are exclusively driven by design and branding, so they may not be very relevant in the context of innovation. Technology is important for some other luxury products like watches or luxury cars, and innovation is significant in these product categories. These products do not necessarily generate huge amounts of buzz, explaining why most of us would not know about these innovations, as we may not be able to afford them anyways and are not actively looking for information in these categories. However, the name of the game for these categories is to effectively reach their prime prospect, a narrow group of consumers involved in their products and significantly more likely to try innovation.

All in all, a typology of innovation can be suggested on the basis of their reach and potential impact on their market and society.

i.    Game-changing

These innovations that are transforming the dynamics of entire product categories, and possibly the way we live and society paradigms.

ii.    Elitist

These innovations that will appeal to a narrow group of people, either newness seekers, or a sub-group of consumers involved in a specific product category. It does not necessarily mean luxury good, as even more mature categories have their aficionados.

iii.    Popular

These innovations that are mostly about newness and defending an existing category from commoditization. They need to appeal to the largest number of consumers.

Using this typology of innovation is very powerful for managers involved in the innovation management process. While each type of innovation will need a specific business model and prime prospect group (on which to focus design and commercial plans), the focus of the development process should be adapted to each:

i.    Game-changing: focus on business model and early adopters

ii.    Elitist: focus on defining the right prime prospects

iii.    Popular: focus on broadening the appeal of the innovation

Adapting the development efforts to each type of innovation using this typology will maximize its success potential.

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