• Ujwal Arkalgud

Consumer-led vs. industry-led innovation. Are you building solutions that no one wants?

Most companies are industry-led. They define their businesses according to internal or industry created terms, definitions and constructs. For example, a food company may say its business is divided into its “shelf-stable” and “refrigerated” grocery business, as well as its new and emerging direct-to-consumer delivery business. Next, it may divide its shelf-stable business into breakfast foods and snacks and its refrigerated business into breakfast foods, snacks and meals. Further, in quarterly and annual reports, the company may call out strategic imperatives to launch what they consider to be “healthy yet convenient” versions of their well established products to add to the consumer’s sense of choice.


This is what we call an industry-led perspective.




Why? Consider the term “shelf stable” for a second. It is completely and utterly meaningless to almost every single one of the food company’s consumers. Instead, these consumers use terms like “packaged food” and “boxed food” to refer to what the industry calls “shelf stable.” The same is true of the term “healthy.” There are more than five major definitions of what healthy means to people, which by the way happen to change and evolve over time. And of course, bombshell events like the Coronavirus further accelerate changes in these definitions from the consumer’s perspective.


This is what we mean by the consumer-led lens.


When we think about research, especially that done for the purpose of innovation, we can see the detrimental impact of the industry lens on the success rate of new launches and initiatives. It’s a result of two key factors.


First, innovation teams get their mandates from senior management that already use the industry lens to identify strategic areas of focus. Next, the process of front-end innovation invariably begins with an examination of trends, which are often a result of research firms analyzing market data and intercepting and asking consumers questions about their preferences and changing habits — in relation to an industry defined trend or opportunity. In the process of gathering market data, shaping questions, and then collating the consumer’s responses, the industry-lens gets smeared all over the data gathering process and of course the resulting analysis.

Let me give you an example —


Plant protein is an industry-lens on a trend that is really about a fear of pesticide leakage into meat, fear over the negative health impact of red meat, affordability of “good quality” meat, and the nutritionally deficient eating habits of Americans (lots of meat and very few green leafy vegetables).

Here’s another one —


“Free-from” skincare is also an industry defined trend. The consumer’s version of it is actually about skin health and longevity — investing in improving one’s health from the inside out. And yes, what you consume is as much a part of it as what you apply on your skin.




Getting to the consumer-led lens for innovation


It may not be realistic or feasible for innovation and research leaders to try to reshape the fundamental structure of how businesses operate and define strategic goals and opportunities. But it is feasible to think about how, during the front-end innovation process, one can get at the consumer-led version of a particular industry defined trend, idea, or issue. This is where we shine at MotivBase. We’ve done this so many times that we even wrote a best-selling innovation book about it.


So why are we able to do this while others can’t?


  1. We don’t rely on asking consumers anything. Our entire focus is on studying what people naturally talk about.

  2. We don’t study anything at face value. We’re a bunch of anthropologists and we leverage AI and Big Data to conduct observational ethnography — getting to the subtext (hidden meanings) behind what’s being talked about.

  3. Contextual intelligence is key: To understand an issue through the consumer’s lens, our AI Anthropologist identifies the natural context into which consumers place topics, issues, and trends.

When a client says “we want to invest in plant foods”, our job is to help them figure out (and quantify) what they really should be investing in. E.g. Nutrition density or “complete nutrition”. Doing so makes the difference between investing in a real trend versus a manifestation of that trend that may or may not be around six months from now. Not only does the consumer-led lens give our clients the ability to identify opportunities that have longevity, it also allows them to dismiss those that either don’t (are volatile) or will never have the scale that one requires for profitable growth.


If you choose to read our book, you’ll learn about why the consumer-led lens is so critical to organizational success in today’s hyper connected, fragmented marketplace. You’ll realize why despite incredible efforts, your innovations haven’t hit the mark in performance, and appreciate the need to think more carefully about the consumer-led lens at the front-end so there’s less triage required on the back-end.


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