Whether yours is an established brand or a scrappy newcomer, the path to intentional and data-driven innovation is the same. Corinne Thomas, Vice President of Business Operations for ClearCut Analytics, outlines three fundamental stages of the process to creating an innovation roadmap:
PHASE ONE: Is the product landscape open to a newcomer?
During this phase, typically spearheaded by R&D, your brand takes a deep dive into understanding the market where products are sold, as well as adjacent markets. You’re gathering information on market size, the top-selling brands and products, the rate of growth in product categories and other quantitative data. “Here, you want to understand what the size of the potential prize is,” Thomas says.
“Sometimes the data might show that a category you were considering is already so well served by existing products, there’s little opportunity for a new product to break through.”
Let’s assume the data shows the opposite, as was the case for a brand that approached ClearCut with interest in entering the nootropics, or cognitive health, category. “Our analytics revealed that the category was growing rapidly year after year,” Thomas says. “We felt confident that it was going to continue to increase and there were gaps that legacy brands were clearly not meeting for the consumer.” When data points to this kind of growth opportunity, you’re ready to move on to the next step.
PHASE TWO: What do consumers really want?
Now R&D, along with the marketing team, explores the “why” of a potential product. Why are consumers buying legacy or newer products in the category? What are the key purchasing drivers? There are various purchasing drivers that innovation teams should consider early on in their process. These factors range from targeted benefits (think healthy aging, immune support and energy) to specific product attributes like delivery method, organic or sustainable packaging. You can expect the unexpected.
“It’s quite possible at this point that what the data is saying may contradict the brand’s ‘gut instincts’,” Thomas says.
For example, the nootropics client had been set on developing a supplement that offered focus and attention benefits to millennials and Gen Z. ClearCut’s data found that category was saturated. However, the analytics also showed there was white space for a product that would offer different benefits to enter and appeal to a different demographic. “What’s more,” Thomas says, “there were only a handful of products that were serving the space in the way that they were proposing, which was growing at a clip that was far faster than any of the other cognitive health categories.” Once the product positioning is clear, it’s time to bring in the science and formulation team along with someone from your brand’s regulatory side. They can educate you about the types of science you’ll need to be competitive and the allowable claims you can make.
PHASE THREE: What’s the product?
With phase one and two under your belt, you’re now looking at the full picture provided by analytics. Now it’s time to zero in on the product SKU you want to create or several SKUs, perhaps as part of a system—like daytime and nighttime formulations. Or, you may look at opportunities to take the same formulation and produce it in different delivery methods. And finally, “Phase three is most importantly about creating the business case,” Thomas says.
“You want to take everything you’ve learned in previous steps and craft it into a story you can pitch internally to executives and other key stakeholders to get the buy-in you need to move forward.”
When using data to guide your process, your case to executives will be compelling. The product or product line you hope to create is validated and proven to sell – and sell well. Plus, other brands may have entered the category first, but you’ve already considered, or even identified, ways to iterate on where you see opportunities or competitors’ missteps. With rigorous retail analytics lowering the risk of failure and maximizing the likelihood of a high return, your brand should have every expectation the product will be a hit.