By Nina Cooper, Associate Director, Dragon Rouge London
Sometimes business buzzwords go rogue and get completely out of control. Once upon a time, everyone was all about ‘delighting’ the customer. Now it has to be disruption. And suddenly, I feel a wave of nostalgia for the old ‘d’ word which at least, in a fuzzy kind of way, put the focus on the people doing the buying.
There’s no doubt technology creates opportunity to shake up markets and establish (usually, time-limited) dominance. There’s no question that businesses and brands need to be alive to the threats of competitors reshaping the market. But the meaning behind ‘disruption’ has been corrupted with overuse.
Originally, disruptive innovation was a pretty a tightly defined concept: using technology in areas where profit margins were tight, growth potential for existing players too small to care about and where the needs of particular niche groups of consumers were not being served. It wasn’t expected to be instant big bang – it was often slow burn, building out from a small customer base to gradually work into the mainstream. Or not. Failure was (and is) frequent.
Amazon, the great disruptor, started with books because it was a struggling market, ripe for a shake-up. Uber homed in on a sector ripe with potential that had barely moved forward since the days of the horse-drawn hansom cab.
Disruptions were built around business models that reduced cost or increased flexibility or adaptability to market demand (often, like Uber and Airbnb, side-stepping regulation in the process).
Disruption, for sure, has created new expectations and reconfigured markets. It has, occasionally, toppled big name brands. But not all profitable innovation has to be ‘disruptive’. For established brands and companies with investment in consumer or customer relationships, in equipment, plant and supply chains, real disruption sometimes makes no sense. They should be making the best of those advantages, keeping very close to their consumers and customers, while endlessly scanning for shifts in their needs and being nimble in response. There’s plenty of space for surprising and competitor wrong-footing innovation and plenty of growth in clever and continuous refreshment and renovation, rather than big bang disruption.
Particularly in FMCG, innovation is often more about using insight to guide product development that’s uncompromising in how it delivers against a target consumer need. It’s about focus, commitment and great brand story-telling.
Brands like Chobani and Halo Top weren’t disruptors in the true sense of the world, but still caught big players off balance and rapidly captured market share because they acted on a perfectly obvious truth that more and more people are worried about eating healthily but few can live without a little pleasure in their lives. They took that insight and followed through with a will.
Brewdog talked the language of rebellion and embraced controversy with a big warm bearhug, both of which connected with a target that craved the ‘authentic’ and didn’t want their dad’s beer. But for the product, they went back to the craft and the hops.
None of these successes reinvented their categories, but they did re-route them, leaving the household names chasing in their wake.
Still, does it really matter that the original meaning behind disruption is becoming skewed? After all, we all know what we mean, don’t we? We want something big and different and dramatic that will revitalise an ailing category or cut the ground out from under the competition.
The hunger to disrupt puts the focus on the market or the category and trying to create seismic shifts, rather than taking a good hard look at the consumer, what they need and how we can smooth away the frictions and bring some joy. — Nina Cooper, Associate Director, Dragon Rouge London
The problem is that the slash and burn mindset that ‘disruption’ creates can stall smart ideas and good solutions that with a bit of confidence, conviction and commercial ‘welly’ could deliver real, sustainable growth. The hunger to disrupt puts the focus on the market or the category and trying to create seismic shifts, rather than taking a good hard look at the consumer, how they live and what’s changing, what they need and how we can smooth away the frictions and bring some joy. The big bad ‘d’ word can start everything off at the wrong place.
Nevertheless, there are some good principles we can take on board from disruptive innovation in its truest sense that can be the route to brand growth and better consumer connection:
• First, throw out the current wisdom about target consumers and look for the groups who aren’t being well served by the market’s current offer – because they can’t afford it, can’t access it or because it doesn’t fit their lifestyle or self-image. Think in narrower slices than Millennials or Gen Z. Who’s excluded or frustrated? Get to know them in their natural habitat. Find out what matters to them. If you can make an innovation really connect with these groups, appeal will ripple outwards, aided and abetted by social media, to a wider audience.
• Challenge your own assumptions about what consumers do or don’t want. It’s changing all the time. Use provocative research to find out. Aldi and Lidl, for example, proved that retailers didn’t have to offer a consistent range of known brands. They could appeal to a sense of smart and savvy discovery.
• Defy channels – look at how using a fresh channel to reach the consumer could genuinely give real value (not just as an alternative, but as a way of being). It doesn’t have to be all about apps, either.
• Scan the horizon for the macro trends that offer opportunity or create threat and explore how you can be first to surf them.
• Take the long view – think not just about the three-year innovation pipeline. Nurture the slow burn that could completely overturn the market and be terrier-like in finding ways to make it work.
• Take risks and be uncompromising – don’t just leave it entirely to the acquisition of new fast-growing small player brands or incubator units, but develop a calculated risk-taking mindset more widely within the business
And finally, of course, take a step back and think about how you can bring some delight to the people doing the buying. Because ultimately that’s what it should be all about.