Innovate not to be innovative, innovate to win. A retail perspective.
I wish I could take credit for that little saying, but I can’t. I was attending the Private Label Manufacturers Association’s annual trade show – PLMA 2011 – this past weekend in Chicago and the guest speaker on the show opening Monday, was Douglas Merrill, former Chief Information Officer for Google. Now he was a dynamic and fun speaker to listen to. Great story teller and obviously had a pretty cool job and a pretty cool time. Absolutely, and thoroughly enjoyed his presentation.
In my humble opinion, he was very appropriate for this group. The reason I say that is the following; if you know anything about traditional private label manufacturers and the retailers that they serve, neither of them are the most creative creatures on the planet when it comes to private label for the most part. Private label has always been, in essence, a copy of what had already been done. Re-packaged for the retailer in their own label so that they could “compete” with the National Brands by offering the consumer an equivalent offering” to brand, but a much more economical price. Really, dare I say I say it, without offending, not rocket science. You merely see what has been done and what has been proven successful and make a similar offering. Wow! How innovative is that!
Now, if you are a good and concerned retailer, and you really have your consumer’s best interests at heart, which most are and most have; then you try to create a product that’s equivalency is really just at the surface level, but is better, way better, below the surface. What I mean is that you should be trying to create something that is at least as nice looking in terms of packaging and shelf presence, but it should be at least as good in quality, and I would argue that is a huge mistake, as you should be trying to better the existing National Brand offering in terms of quality! So go out to hammer both packaging quality as well as ingredient quality. If you think about it, the initial research and development has been “taken care of” by the brand, the advertising and marketing budgets have been absorbed by the brands, and the customer acceptance has already been established by the brand. Why would you not try and better it? You should never just go out to give the consumer as close to brand as you can get, try and go better where applicable, otherwise why do it? Don’t you play to win? Or do you play to tie or at just get close?! Seriously?!
Ok, so where does Douglas come in? Well one of the key take aways that he repeated a few times was my title above; “Don’t innovate just to be innovative, innovate to win”! Very simple and very concise and I hope did not fall on deaf ears. This industry can be dominated by an older and more established and conservative group that may be a little more reluctant to change, especially if the wheel ain’t broken. There are not a tonne of young guys in the industry (at least as far as I could see). This is not a shot to the industry or to the more mature demographic of the industry. With the age comes the experience and wisdom. However, with the youth comes the risk taking and boundary pushing. I watched the room, a packed house, and very few left the presentation, but I wonder how many really got it. This young guy, flamboyant and charismatic as all heck, talking to them about innovation etc. What does he know?! To make matters worse, this young man starts off by self-admitting that the only thing he knows about retail is that he knows how to shop and he has frequented retail many times, and left many dollars behind in the stores that he has frequented :-))). Oh my, there is an expert speaking to a room with thousands of years of experience! Tough sell to a crowd like this.
Now, why I really got a kick of Douglas’s quote was that the Private Label industry I don’t think is viewed as innovative within the industry and probably not by consumers. It’s merely a copycatting group. Not fair, even though that is a self-inflicted wound for the most part. It is not so much the manufacturer’s side as it is the retailer that can create this. The manufacturers can do anything, they tend to get forced or moved into a box that is dictated by the retailer’s desire to be the “same” as brand. How sad. Why not try and give you, the consumer, a bit more when and if we can? Maybe it’s the addition of ingredients that are more healthy or natural and/or maybe the deletion of less natural or less healthy components. Maybe it’s a size that is better suited to what the consumer really needs. Maybe it’s making the package sexier or more conducive to what is actually needed or wanted. I don’t know, could be anything.
Sometimes, the offerings are going to be just the same as national brands. Governmental regulations won’t allow the changes for example. This would be true in prescription drugs and over the counter drugs. We can’t deviate there – sorry :-)).
However, there are many great examples where as an industry we really came out to play. I have to give a few examples from of a couple of my retail competitors as well as London Drugs.
I love that fact that Presidents Choice is focusing hard, and spending money to advertise their organic line of baby foods that are very well priced and a great offering for little ones. I see those commercials way way way more than any brands! President’s Choice goes from old school private label to being a National Brand competitor. They are bestowing the virtues of great private label practices by actually making you feel guilty buying brand as by buying brand you are spending too much and you are actually not buying the best for your babe or toddler. Ouch!
I will give them one more and even give Wal Mart one (I am once again flying while writing and I think the travel is getting to me – making me melancholy and way to fair minded). I love the way the two of them have made Joe Fresh and George not just clothing knock offs, but once again, brands. These guys are looking at styles and giving consumers a chance to look good and look “in” for lack of a better, but at a reasonable cost to the consumer. They are spending money to advertise and “brand” themselves. Great job!
Innovate not to be innovative, innovate to win.
I will give us at London Drugs a couple of good ones (we have many!) We did not want to give you a less expensive imported honey option for the London Orchards Brand. We wanted to give a 100% pure Canadian honey that was very reasonably priced versus the brands (private label or national brands). We knew, and know, that many offerings at Canadian shelves may not be Canadian honey as the imported honeys are much more economical. Believe me; we could have done the same. However, LD and you, would have gotten a cheaper honey on the shelves at a lessor retail, and you would have saved a bit, and we could have made a bit more; but why not step up, and step out, and play a better game. Did we both not want to win this way?! We went out and searched and found a 100% non-imported, 100% made in Canada honey! As we should have! Why scrimp on quality? This is our brand and we should be doing better for it, and for you.
When we looked at redoing our London Drugs brand of multi vitamins, that most would think just compete against the large national brand, we wanted to do a bit more there as well. Many of the brands add coloring to their multi vitamins and add artificial sugars to their children’s multis. We choose to take the dyes out and we chose not to use artificial colours or sweeteners in our children’s multis. Again, step up and step out and play a better game. Not huge changes and not going to set the world on fire, but done to win and not just copy!
Innovate not to be innovative, innovate to win! I love it.
There are a tonne more examples and this could go on and on. There are also a tonne of examples that we can show where there are clear fails within our industry and areas where retailers and manufacturers did not do enough to give the consumer a better choice. They played to tie, or played to just get close. Still a game of learning.
Now the above examples are not huge innovations in the grand scheme of life. They are not iPods that have changed an entire industry and changed the way we listen to music. They are not iPhones and Smartphones which completely change the way we view and use cells phones. They are not an iPads and tablets which is shaking the entire laptop and computer world. No, they are small and relatively insignificant compared to those ones. They are not sexy, they are practical and pragmatic, but they do have large impacts in our world. They help us all save a bit money without sacrificing quality!
As I walked the rest of the show, I continued to have Douglas echo in my mind. This idea was obviously private label focused for me as I was at a private label show, but it was also making me relook at what I do within my everyday dealings with brands and within the planogram sets with respect to national brands. What can I do differently? Hmmm, more to come…
Innovate not to be innovative, innovate to win. Very simple and very clear. Thanks Douglas; you got me thinking!
Ciao for now @kootenayborn