Disruptive innovation reverses category clichés to create a dramatically different and better customer experience. It defines the vision that breaks the category conventions and creates a new platform for growth. This approach to innovation focuses on creating a totally new business model, undermines the category leader, challenges category dogmas and maintains the challenger mentality even when the disrupter becomes the leader.
Think of how Uber has completely disrupted and transformed the taxi-hire business or how P&G works to identify future behaviors which can lead to disruptive new paths of growth. A great example of this is Tide Spin, a smartphone app that allows consumers to order laundry pickup and delivery from Tide-branded couriers. Enter Dollar Shave Club or better yet, Warby Parker.
The eyewear category had lagged behind other sectors in moving online. Less than 1% of purchases in the U.S. glass market were made online and customer experiences of buying glasses were unsatisfactory. Eyewear retailer Warby Parker launched an online business that focused on the provision of high-quality customer service, with low prices. It simplified – and disrupted – the path to purchase by enabling customers to upload a picture of themselves to try on glasses virtually. They could order up to five frames to try and there was no fee for returns. Word of mouth fueled a significant increase in online sales and drove offline sales as well.
THE INNOVATION HYBRID
It is important to remember that there are several different ways to innovate and you may need to explore a couple of approaches in parallel, such as:
Brand-led innovation enables a brand to fulfil its promise or purpose through new products, services and experiences. An example is CVS’s Digital Innovation Lab Its Digital Innovation Lab. The Lab is tasked with making healthcare seamless for customers. Some innovations include an Apple Watch app, which customers can use to fill prescriptions remotely and set reminders to take pills. Using your core to transform your business allows you to identify growth opportunities that you are leaving on the table in adjacent categories and stretch into completely new spaces.
Co-creation or customer-led innovation involves customers early in the process to identify needs and co-create product and service ideas. The process always starts with rich, qualitative insights. Consider riding along a journey with customers through mobile ethnography or inviting customers to share an experience in an online community. Bring customers into the innovation process. Working in teams with customers directly over longer periods builds relationships that reveal their motivations in greater depth.
A great example is the Gatorade: G-Series Product Launch. Gatorade had long been the established market leader in the sports drink category. But when the Coca-Cola company launched its price competitive Powerade, the market leaders needed to sustain its advantage. After an initial flurry of new flavor launches, it realized that it was not maintaining market share. So, its parent company, Pepsi, turned to its lead customers for guidance on where to innovate – athletes themselves. The team learned that in order to outperform at events, athletes focused as much on preparing before the event and recovering after as they did during the event itself. With experts, it developed a unique range of products that aimed to support athletes throughout the total event journey.
Innovation should always be rooted in a relevant customer need and interrogating the existing customer experience is always a smart place to start. Also, a test-and-learn approach is critical to most innovation approaches and requires permission to experiment, fail and learn fast. Risk will always be a part of managing innovation projects, but the best way to ensure your final launch hits the mark is by constantly testing and optimizing your idea with the end customer and in small scale pilots or experiments. Your category is waiting to be disrupted, disrupt and dominate, but remember to never abandon the challenger mentality.