News

A Quarter of Innovation

By Rob Anderson

The latest trends in innovation

There is no shortage of innovation in the world. In fact, it is often hard to keep up with it. At Edengene, we monitor the latest innovations from around the world on a regular basis to inspire us to help our clients in new ways. Inspiration can come anywhere - from major brands and new start-ups in both industrialised and emerging nations. We come across all sorts of new and exciting advances, from pioneering products and services to exciting business and operating models and inventive customer experiences.

Product and service innovation

There have been a number of interesting product innovations bubbling up through the primordial soup of modern technology.

 

Coffee joulies are a novel idea to avoid the unpleasantness of coffee that is either lukewarm or as hot as the sun. These metallic coffee beans are designed to absorb the heat from a freshly poured cup, bringing it quickly to a drinkable temperature then slowly releasing that heat back into the brew to maintain the warmth for an extended period. It is a great idea from a truly innovative company and will no doubt quickly attract the attention coffee consuming fans.

 

The company behind the joulies have also taken an innovative approach to financing the product, avoiding VC funding or bank financing by ‘crowdsourcing’ the investment instead. Manufacturing of the coffee joulies is carried out entirely on an on-demand basis, ensuring that risk is kept low and customer interest high. Customers register on www.joulies.com and, once a financially viable number of customers have registered, a production run is started at the end of which the products are shipped directly to customers.

 

Smartphones are a ubiquitous presence in the modern world and are being increasingly leveraged by manufacturers to add a touch of convenience (and to compete with other devices on the market). US firm Lockitron, for example, sells an aftermarket deadbolt locking system that can be controlled through a Smartphone app or via text message. It is a great solution for landlords, property managers and anybody else who may need to grant access to a property from a distance. 

 

Applying Smartphone technology to application areas is something we have observed as being on the increase for some time. As Smartphones gain more functionality the possibilities appear endless, and now the only boundary seems to be the extent of the imagination of the developer! 

 

NFC (Near Field Communications) – shortwave wireless technology facilitating the transmission of data - has been on the horizon for a few years already but now seems to have reached the point where it could really take off. Google’s next generation Smartphone - the Nexus S - has inbuilt NFC functionality and mobile phone provider Orange launched its ‘QuickTap’ NFC contactless payment service, using Barclaycard to provide the transaction platform. The service uses the same readers and transaction platform as existing card-based contactless payment solutions, meaning there is already an installed base of over 50,000 retail outlets in the UK. Although there are no take-up figures available yet, if these developments are anything to go by, the momentum behind NFC finally seems to be building.

 

Business model innovation

Business models represent a fantastic opportunity to differentiate and gain competitive advantage, but they are often difficult to develop and implement due to internal stresses and market complexities. As a result, new and successful models are always worth examining.

 

The short-term rental model has been applied to a wide range of industries over the last year or so. We discuss the relative merits of the model in more detail in our ‘megatrend of the quarter’, but the following are a few examples that have jumped out at us over the last quarter.

Transport

The likes of ZipCar and Streetcar have become major brands, offering short-term car rental as a realistic alternative to car ownership. The London Cycle Hire scheme (and similar schemes around the world) has had a similar effect on cycling, giving a broader spectrum of local people access to this environmentally friendly and convenient form of urban transport.

 

Fashion

In the arena of designer fashion, new start-up, Wish Want Wear, is now testing out a similar model, hoping to access a market they have identified in which customers have a desire for high-end designer fashion but not the means to spend in excess of £500 on a new dress. With Wish Want Wear clothes can be rented for a few days at a time, with fees ranging from £25 to upwards of £100, considerably less than a customer would pay to buy the same dress to own.

 

Public Sector

It is fair to say that when we think of innovation, we rarely do so in the context of the public sector. The Spanish city of Murcia is trialling a new model to reduce congestion and car ownership whilst increasing the use of public transport. Under the scheme, residents are now able to trade in an old car for a lifetime pass for the public transportation system. It is a model that is unlikely to generate a positive financial return for the city (particularly in the short-term), making it difficult for a private sector firm to replicate, but should have many benefits for the city of Murcia – and indeed any other congested city - including environmental, brand / PR impact and budgetary increase through increased public transport usage. 

 

Customer experience innovation

One company to have recently innovated its customer experience is the Italian restaurant chain Pizza Express. Having studied what customers expect from its outlets (a certain speed and efficiency of service and food delivery, for example), as well as looking at where the major hold-ups tend to be, the company has now released an iPhone app to handle billing and payment for customers eating in its restaurants. The app costs nothing to download, ties in with the customer’s PayPal account and is supported by the rollout of free Wi-Fi in Pizza Express restaurants. 

 

The Danish and Swedish post offices have taken a similar route to improving the customer experience with respect to postage stamps, which can now be purchased by SMS message. In order to use the service, the customer sends an SMS message to a designated number and receives a 12-digit code in return to write on the envelope in place of a stamp. Although a Smartphone app would also have been a viable solution for this project, the successful use of the SMS message goes to show that it is not always necessary to use the latest technology to innovate. It is also worth bearing in mind that if they had chosen an app over an SMS message, the post offices would have dramatically reduced their addressable market.


Channel Innovation

Finally, the channel is another area where there have been a number of interesting innovation developments. Physically distributing a product or service to customers can often create a number of challenges, particularly in developing economies that lack infrastructure, and in parts of the world with a different culture or lifestyle to a product or service’s home market.

 

Supermarket giant Tesco had precisely this challenge in South Korea. Home Plus, Tesco’s brand in South Korea, launched a series of ‘virtual stores’ aimed at customers waiting for trains on Underground platforms. The virtual store shop front (which looks much like a ground level billboard) is ‘stocked’ with pictures of a range of popular products, each one with its own barcode. Customers can order by scanning the codes of the items they want with their Smartphones whilst waiting for the train. The shopping purchased at the station is delivered to the customer’s door when they get home from work.

Conversely, Pixel Electronics, a Belarusian home appliances business, had to deal with a lack of public infrastructure when trying to grow its business outside of Minsk. Pixel faced the dual challenges of such low internet penetration that an online model just wasn’t viable and such a lack of major population clusters outside the capital that a physical presence was impossible.

 

The company innovated around both the online and physical models to achieve the best of both worlds. It set up electronic terminals in other existing major stores around the country, which gave access to Pixel’s online retail platform. These regional stores receive a commission from products sold through the terminals, whilst Pixel achieves its goal of growing its business and expanding its market presence.

 

 

Rob Anderson

Rob was a founding director of Edengene in 2000, having previously been head of the business growth practice at PA Consulting Group. A chartered accountant with strong finance skills, he has 20+ years’ consulting experience working with blue chip companies, designing and directing multi-year growth and innovation programmes. Rob is the author of Edengene's customer-led innovation methodology, which provides a structured approach to innovation to deliver revenue growth.