Which road are you on?

May 01, 2009 9:30 PM  By

Like Robert Frost’s two roads diverged in the woods, brands these days have two choices: innovate or stagnate. It really is that simple.

You could do nothing, hold your breath, sit back, wait and see, act fearfully. Or you could take risks, make waves, be bold, think about inspiring your customer and adding value to your customer experience.

Innovators will see these topsy-turvy times as chances to gain ground, launch new products, create their own opportunities and draw customers closer to their brands.

Fortune magazine recently revealed its list of most admired companies in their industries in the category of innovation. The list, which includes Apple, Walt Disney, Google, Nike, Herman Miller and Amazon.com, just to name a few, won’t surprise you. For these companies, innovation is a full-time, all-the-time strategy, not a reaction to economic turmoil.

Furniture maker Herman Miller has been a Fortune most admired company for 21 of the past 23 years. The marketer’s Website states: “Who we are is a reflection of our work and the way we do it, our history and our values, and the ethics of innovation and design that gets into your bones around here.”

An excerpt from Herman Miller’s corporate mission notes that “Such innovation is a result, not a goal. Innovation results from thoughtful research into the complexities of our customers’ needs, exploration into materials and processes, and designs responding to social and economic trends in the global market.”

Another aspect of innovation — risk taking — is just as important, the company says: “Herman Miller tries to maintain its appetite for risk. As we have grown larger and become responsible for more equity, the pressure to minimize risk has mounted. Nevertheless, getting behind promising new products — that sometimes become innovations — remains a risk we are happy to embrace.”

The road to innovation can often feel like a rugged, four-wheel driving path with unexpected twists and turns everywhere you look. It isn’t for the faint of heart. Here are several ways companies both inside and outside our industry do the hard work of keeping their brands relevant:

They introduce new products

Direct merchants can learn a lot from the packaged goods industry. For instance, Procter & Gamble constantly provides both its customers and its competitors with inspiration.

With a continual stream of new product innovations across nearly 50 categories, P&G never rests on its laurels — whether it’s an incremental improvement in packaging (Bounty’s 25% thicker paper towels), or a reformulation in ingredients, or a line extension (three new Venus razors) or an entire new product.

The specialty ice cream world has also been providing plenty of food for thought during the past few months: Cold Stone Creamery is branching out into ice cream cupcakes, cheesecakes and iced coffees. Haagen Dazs introduced seven new flavors called Five (for five ingredients), and Ben & Jerry’s unveiled nine new flavors.

The tech industry is constantly abuzz with product innovation. HP recently partnered with a fashion designer to create the “Vivienne Tam HP Mini 1000.” It marketed the violet and red mini PC as the world’s “first digital clutch.”

Praise Banners, a marketer of church flags and banners, knows the importance of unique and compelling product — especially for customers with conservative budgets. “Our focus has been on exclusive licensing, exclusive distribution of patented construction methods, and fast turnaround customization,” says Drew Trotman, president of Praise Banners.

Customers love new and different. What new products are in your pipeline to keep your customers engaged?

They think not-so-big

“Not so big” is a term coined by bestselling author, architect and cultural visionary Sarah Susanka to focus on making things “better not bigger.” Brands are boutique-ing themselves in various ways to make shopping more convenient for their customers. Perhaps the days of the “everything-under-one-roof” have only served to exhaust shoppers.

Office Max launched three tiny stores in the Seattle area called Ink Paper Scissors. These locations, which measure 1,500 to 2,000 sq. ft. in size, sell just 2,000 items.

Burger King recently opened its first Whopper Bar offering less than a third of its regular items. And Gap is opening a small, 1,500-sq.-ft. accessories store called Edition. Most items sold in Edition will be priced at less than $100.

This boutique-ing trend depends mightily on the power of creatively editing the brand’s overall assortment for these reduced footprints. The reconfigured merchandise must tell a new story.

Smaller may be the new way to focus your customers’ attention and respect their time. How can your brand act not-so-big in ways your customers will appreciate?

They promote empathically

Who isn’t watching their spending more closely these days? Brands that speak to customers’ more intentional shopping behavior demonstrate both loyalty and intimacy.

Many brands are promoting a “name your sale” offer to give customers a bit more control over what they can afford to buy. Apparel retailers Ann Taylor and Talbots are both working to cater to modern women shopping within their budgets.

Two companies, however, earn the “we really get what you’re going through” customer empathy award: Hyundai and Jos. A. Bank Clothiers. Both are letting customers return their new purchases (autos and suits, respectively) if the customers lose their jobs in specified time ranges.

Continue on Page 2

Not only does this strategy sound like the right thing to do for consumers, but customers who may have to take advantage of the offer will likely remember these companies as soon as their circumstances change.

All brands can revisit their customer-empathy meter. How can you let your customers know that you truly care about them in ways that are meaningful?

They get back to basics

Innovation is great, but sometimes getting back to the simple basics can be vital to your business. Brands can too easily stray from their mission by many seemingly innocuous decisions. Sometimes you need a course correction not only to get back on track, but to leap forward.

Eddie Bauer is doing just that with its return to its mountaineering roots. According to a recent profile in the Wall Street Journal, the company actually hired a historian to create a look back at the brand.

The outdoor apparel and equipment merchant hired Jim Whittaker, the first American to climb Mount Everest — in 1963, in Eddie Bauer gear — as a product spokesman and consultant. Getting back to a brand’s roots can be a wellspring of both innovative thinking and doing.

Brands also need to invest time internally to see where the “basics gaps” are occurring. Another outdoor apparel marketer, The Orvis Co., is concentrating on two areas of focus: keeping its best customers and finding ways to acquire new customers online.

“The most important thing an e-commerce Website can do is to get the basics right,” says Brad Wolansky, Orvis’s vice president, global e-commerce. The merchant this year is focusing on improving the user experience — and conversion — “by filling in some of the holes here and there with better functionality, better experience and better product communication,” Wolansky says.

They experiment as they go

Brands that take the road less traveled believe in taking risks. They dabble in little ways. They dream in big ways. Experimentation is part of their success.

They aren’t sure of all the answers up front. They have learning frames of minds. “For new customer acquisition, Orvis is experimenting with the next generation of behavioral marketing and figuring out that opportunity as we go,” Wolansky notes.

Years ago, I saw a bumper sticker in the Colorado backcountry that said, “Life is too short for paved roads.” So on behalf of your customers, I encourage you to take the road less traveled — even if it is a bit bumpy at first.

Innovate. Discover. Experiment. And as Jeep, the king of four-wheeling, would say, have fun out there! l

Andrea Syverson (asyverson@ierpartners.com) is president of IER Partners, a consulting company specializing in brand and merchandising transformations.