What Innovation Means in 2018
Merriam Webster defines innovation as a “new idea, device or method.” Brands have been developing new products and services for years, some more successful than others (cough, Google Glass, cough, Segway). But in today’s world, to be an innovative brand, it’s no longer about product innovations. It’s about creating new business models and customer experiences, and at the core creating impact.
Think about Birchbox, the beauty subscription box, and how it changed the way consumers discovered and tried beauty products. Before 2010 you’d have to go to the store to sample and purchase products, and even though you might be able to return them, you had to do your own research to figure out what was new and what the benefits were. Enter Birchbox, which allowed you to get multiple products every month and then invest in the ones you love, without taking multiple trips to the store. Subscription boxes introduced an idea of personalized, curated experiences that didn’t exist before and they saved subscribers time and money. Birchbox was a simple idea that changed the way we think about sampling and discovering beauty products, and ever since this business model has continued to evolve with subscription e-commerce market growth by more than 100% percent a year over the past five years.
When looking at innovative brands a few commonalities start to arise:
They use data-driven insights to meet existing or unarticulated needs.
With so much data available to us, constantly improving algorithms enable increasingly personalized experiences and help people make choices more efficiently. Spotify uses listener data to surface weekly song recommendations in a custom mixtape, and more recently a Time Capsule playlist with throwback jams personalized to your tastes. With an algorithm so on point, users want to go back because they feel like it really knows them personally.
Google’s crowdsourcing mapping app, Waze, discovered that U.S. drivers waste an average of 42 hours in traffic every year, along with $1,400 in fuel and time. So they created technology that uses real-time data from its user base to provide a solution, helping municipal governments, emergency services and everyday U.S. drivers navigate traffic. The company is further tackling congestion with their new ride-sharing program, Waze Carpool, which matches commuters traveling on similar routes so they can take advantage of HOV lanes and split gas costs.
They remove barriers to doing business.
The way we communicate with our devices is changing drastically and brands have to keep up, and even get ahead. Before, when we searched for something online, we’d type it into Google, but that’s no longer the case. Pinterest is evolving their own social media model with Pinterest Lens to enable people to search for information simply by aiming their phone camera at objects around them, making it easier to discover content. In addition to the visual search frontier, we’re also starting to pick up our phones and speak directly into them. Voice assistants like Amazon Echo and Google Home allow for us to request and confirm purchases and decisions all with our voice.
And we can’t talk about innovation without talking about Amazon. After changing online retail with Amazon Prime, they’ve now changed the way we think about retail with their Amazon Go stores. To tackle the stressful in-store checkout process — which is often full of clogged lines for cashiers and customers who can’t figure out self-checkout kiosks — these stores of the future automate purchases without cashiers.
They respond to society’s needs to deliver real value.
Innovative companies have the ability to create opportunities in society that tap into the well-being of the future. Airbnb, for example, empowers landlords and tenants and brings income to resident hosts and local businesses that strengthen communities and economies. Or more recently, Tesla’s work in Puerto Rico to restore reliable electricity after the devastating hurricanes. The project uses solar panels and batteries that allow its systems to generate all the energy they need on its own, which is key to bringing these underdeveloped regions a more reliable energy grid to withstand future natural disasters.
Innovative brands create resounding impact on consumers and communities. We all must take on the responsibility of being innovative to create brands that put customers in the center — developing ideas and solutions that meet new requirements, existing unmet needs and, most importantly, the potentially unarticulated needs that consumers can’t even anticipate themselves. We must envision the future without the constraints of today.