NEW YORK — Innovation is usually a tough nut for legacy marketers to crack in the perfect of times. Following years marked by unrest, that challenge has risen while the necessity to appreciate exciting recent products has been amplified by shifting consumer trends, including the emergence of Gen Z.
Speaking at Advertising Week New York on Thursday, executives from Ford Motor Company and Edgewell Personal Care discussed navigating the pressures of innovating under an environment of constraints, with an emphasis on contingency planning for every step of what are sometimes yearslong development processes. The discussion got here as price hikes driven by inflation have impacted the CPG industry while auto corporations are grappling with the United Auto Workers strike, which recently led Ford to put off employees.
“We see constraints in terms of how we are able to price something where we make it value launching a product. There are constraints in terms of whether we’re really meeting a novel consumer need,” said Camilla Medeiros, vice chairman of global innovation and insights at Edgewell, an organization that markets brands including Schick, Playtex and Banana Boat sunscreen.
“More recently, the constraints have actually been compounded,” added Medeiros.
Uncovering wins
Some constraints, just like the pandemic, have led marketers to look abroad for his or her next big thing. Edgewell recently ported over the concept of “dermaplaning,” which is popular in Asian countries like Korea, through its Schick Hydro Silk Touch-Up product. Dermaplaning normally involves using a single small razor to remove hair and exfoliate skin. Medeiros attributed its bump in interest in the U.S. to the pandemic, when many individuals needed to spend more time looking at their faces lit up on screens.
“That innovation didn’t exist here in the U.S. until just a few years ago and it’s really taken off,” said Medeiros. “We’ve been capable of scale it based on a trend that we saw and a consumer need that we began to see emerge in the U.S., especially with COVID.”
Emergent media channels can be a blessing and a curse. Shopping trends driven by TikTok have accelerated the pace of research and development, putting a strain on marketers, The Wall Street Journal previously reported. But a success TikTok campaign can lead a product to fly off store shelves, as was the case with a Schick Hydro Silk Sugar Wax Roller. The at-home hot wax offering was one other idea born out of the pandemic, recognizing that many salons were closed, and was promoted through entertaining and instructional TikTok videos.
“We launched in 12 months or so, perhaps even less,” said Medeiros. “We sold out through all of our retail channels [including Walmart and Target]. That was a fun, unexpected innovation. We tapped right into a need and the timing was good, but we were really amazed in regards to the consumer change in behavior.”
Accepting failure
A frequent point brought up in the course of the talk was the willingness to simply accept that many innovative concepts won’t pan out. But the power to welcome risk varies by vertical. CPGs that move low-priced products on an everyday basis sit in a unique position than automotive corporations, whose vehicles are sometimes the second-most expensive purchase consumers make behind homes.
“It often takes five years to get from concept to tires on the road,” said Jennifer Brace, chief futurist at Ford. “When it involves taking big risks, by the point our products are attending to the market, they don’t feel like risks because there’s been a lot research that goes into it.”
Both brand representatives emphasized that their teams must think years in advance and remind other departments to not put all their eggs in one basket. Contingency planning involves devising not only plan Bs, but additionally plan Cs and Ds for when things take a turn.
“We prefer to call ourselves the polite contrarians. Sometimes we kind of rain on their parade,” said Brace.
Edgewell addresses the constraint factor by following a “fewer, greater, higher” ethos, Medeiros explained. Each 12 months, the corporate receives a hard and fast budget around promoting and promotional spend and must prioritize the areas which might be going to drive growth. Making those allocations, or feeding “all of the hungry mouths,” as Medeiros termed it, is complicated by the CPG’s complex relationship with retailers.
“It sounds easy — fewer, greater, higher innovations — but they’re not necessarily all the time panning out that way because there are very disparate needs on the retailer, at the patron and on the market level,” said Medeiros.
Fending off disruption
Beyond exterior influences, just like the economy, legacy marketers also need to fend off disruptors. Direct-to-consumer (DTC) upstarts like Harry’s and Dollar Shave Club upended the male shaving segment well before COVID, and proceed to eat into market share for brands like Edgewell’s Schick and Procter & Gamble’s Gillette (Edgewell made a bid to buy Harry’s in 2019 but was blocked a 12 months later by the Federal Trade Commission, while Unilever has owned Dollar Shave Club since 2016). Meanwhile, Ford has accelerated its bets on electric vehicles attributable to the encroaching popularity of Tesla.
“All the categories that we compete in have been disrupted at different points in time and different degrees. We’ve learned you possibly can’t beat them,” said Medeiros. “Gillette couldn’t beat Dollar Shave Club or Harry’s, and P&G has deep pockets and resources to actually shut rather a lot of things down.”
Still, Medeiros sees legacy CPG brands and DTCs as having the potential to develop complementary relationships. While DTCs are well-attuned to standing up the categories of digital business models that young consumers find appealing, they lack the knowledge and connections needed to crack into brick-and-mortar retail in many instances. Edgewell successfully acquired Billie, a women’s shaving line, in 2021 for $310 million.
“You just need to learn to compete with them otherwise you acquire them,” said Medeiros of DTCs.
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