The Next Generation of Innovation

The recent recession changed everything in business, especially the way that consumer goods (CG) companies innovate new products. Innovation once meant “disruption” — dramatic technological or business breakthroughs. But thinner profit margins and shorter product cycles have redirected organizations to take a more pragmatic approach. This month, CGT picked the brain of Surabhi Pokhriyal from Cognizant Consumer Goods Consulting Practice to find out what exactly “innovation” means today and what its accompanying business processes and technologies should look like.


CGT: How are current market conditions driving innovation in the CG industry?

Pokhriyal: Triggered by business pain points and the latest in available technology, “reactive” innovations have been embraced by most companies. For example, our clients are now increasingly using point-of-sale data not just for internal planning, but also for sharing with vendor partners, which helps close the loop faster and better. Sustainability is also driving a new wave of innovation, spurred by government regulatory requirements as well as consumer demand.


CGT: Are innovation processes changing in order to bring meaningful new products to market?

Pokhriyal: CG companies are now transitioning from a macro to a micro level of innovation. Objective market insights at the most granular level of customer groups or demographics (down to the individual customer level), powered by the ability to transform information into business insights, are driving micro-level innovation. So a company that has robust supply chain processes coupled with strong demand planning (macro level) can extract marketing insights and drive demand signal repository activities (micro) with great precision, resulting in cost efficiencies and quick market response.


CGT: Can you share an example of micro-level innovation?

One of our clients, a leader in luxury goods and cosmetics, has been at the forefront of using the online medium to promote brands for more than 30 years. They have kept pace by being sensitive to consumer trends across multiple cultures and being watchful of market maturity in the online channel. Some of their markets have the latest and greatest social platforms, e-commerce, mobile commerce and digital media, while others simply feature brand web sites that drive traffic to stores. They found success by paying attention to the little things, not through the slickest technology.


What role does technology now play in innovation?

Pokhriyal: Innovation is no longer the prerogative of research and development alone. Marketing, sales and other core functions are now reaching out to their IT counterparts for breakthroughs through technology. Cognizant has co-funded technology-enabled innovation programs that run the gamut from cost reduction to business transformation.

It’s important to remember that technology not only makes business processes better-faster-cheaper, but can change the nature of what we do — even render a business process obsolete.

Technological innovations, like virtualization, cloud technology and social media, will not only change shopping habits, but will shape the way CG companies make decisions about IT budgets, marketing strategy and business policies.


CGT: How are social media channels being used to support internal and external innovation?

Pokhriyal: Social media provides a very efficient way for consumers to collaborate and share information with peers, while CG companies can track and monitor customer-generated content to leverage as insight.  One of our clients in the beauty space has rolled out custom-built social platforms for employees, vendors, sales teams and consumers. By moving social networking beyond the concept of community alone, the company can integrate stand-alone web sites and give them single sign-on capability, along with a tailored suite of groups, discussion forums, polls, widgets, news feeds and more.

Internally, a common global platform allows for the seamless flow of ideas and feedback, breaking down hierarchy and other communication barriers. This drives further innovation inside out and outside in.

CG companies have come to realize that their customers and employees were always social networks. Taking them to the Internet is what unlocks their hidden value.