Retail innovation has become a hot topic as the landscape for consuming goods changes with technology. Kraft Foods is a globally recognized company that grosses more than $18 billion each year and boasts an extensive brand portfolio, but it has not always been a smooth road for this company to grow and remain successful in the global marketplace.
Increasing commodity costs and the changing wants and needs of consumers was the challenge, but according to Kraft’s vice president Barry Calpino in a recent Wharton Business Radio interview, it is these six lessons on retail innovation that allowed the company to remain competitive:
- Invest Past the Launch
New products were hitting store shelves each year, but Kraft was neglecting to continue to invest in these brands past their launch. According to Calpino, “The number one consistent cause of failure is not investing in a good idea beyond just the launch period.” Deciding to change its standard business model, Kraft chose to spend $50 million when launching Mio, a water enhancer, over the past four years past the launch date. The result: a new brand, a new food and drink category, a number of innovation awards, and more than $800 million grossed worldwide. See past the launch date and strive to turn a one-time idea into a sustainable b
- Understanding What People Hate About Your Product
Negative feedback can be just as powerful as positive feedback, particularly if companies use it as a source of innovation. In his interview, Calpino cites two examples of how understanding why people dislike your product can lead to a greater gain:
Exhibit A: Campbell’s Soup. The main complaint about this product was that the pieces of meat were too small. To help combat this, the company created Chunky Soup, a product that has lined market shelves now for over forty years.
Exhibit B: Wrigley’s Gum. Customers found that the flavour of the gum was short lived, and so Extra, a brand known for long-lasting taste, was born.
In both examples, Kraft took negative feedback and used it to create new products that customers would love.
- Filling Your Pipeline with Ideas
Even though a single idea may take years to implement, it’s important to keep your pipeline full of ideas for the day you proudly hand off the project to your successor. Continual growth demands that an organization never stay focused on just one idea. Good ideas are rare and you can avoid missing them by maintaining a constant stream of fresh and innovative ideas. In other words, keeping that pipeline full means that you’ll never be at a standstill searching for the next idea.
- Retail Innovation Is about the Customer
A customer’s preferences are constantly changing, meaning that companies need to be in tune with them in order to not only keep up with the trends, but to stay ahead. Understanding the wants and needs of a customer now means that organizations will be able to make more intelligent predictions of what they will want next year, next month, or even next week.
- Renovate While You Innovate
Companies need to keep their existing products interesting so that they do not only maintain their current customer-base, but are able to continually reach out to new ones. Take Kraft’s “Velveeta” for example. By considering the feedback provided by current lovers of the product, Kraft was able to successfully repackage the product and maintain this skillet dinner line’s “liquid gold” status by pleasing old customers while welcoming aboard new product fanatics.
- Employee Buy-In Is Crucial
Given its organic nature, innovation can be challenging and even discouraging to the employees of any organization. Company culture needs to support innovation while encouraging a positive mindset and energy. A combination of top-down and bottom-up strategy that stimulates the creation of new ideas while maintaining that positive energy is what will help generate that employee buy-in at every level of an organization.