Experience Innovation

The Next Frontier of Differentiating and Driving Growth

Picture “Innovation”

Do you think of new technology? Flashy add-ons? Trendy menus? Today’s product innovations, like the growth they generate, are often incremental and fleeting. R&D spending rose 5.1 percent in 2015 and yet revenue for the same companies increased less than 1 percent. Technology diffusion and globalization are making it harder than ever to stay a step ahead of the competition. And, the radical transparency of the digital world favors “Excellent” reviews over brand loyalty. So what are today’s best, most innovative brands doing to stay distinct and relevant? They’re diving into the experience.

Experience innovation

Going beyond the product

Companies are creating new value and gaining brand loyalty not by focusing on specific product features or design, but by reimagining the broader experience of how customers use their products. Car service Uber didn’t change the vehicle or retrain the drivers; it fundamentally changed how you order, meet and pay for rides. Airbnb didn’t redesign the travel portal or the hotel; it completely rethought how people can find the room they need. The list goes on: Snapchat changed news consumption. Warby Parker fashioned eyewear without big name designers. And while Gillette is looking at one more blade on the razor, innovator Dollar Shave Club shook up the market with a simple, low-cost mail subscription model.

Even legendary product innovation leaders see that they can increase sales by improving the experience. Nike is innovating the fitness experience and the community, not just the shoe. Tesla lets you buy a car using a digital signature, request home delivery and schedule services with roaming technicians who can remotely diagnose issues.

Warby Parker saw that purchasing fashion eyewear is cumbersome and made expensive by the specialist optometry channel. So it redesigned the buying process, from beginning to end, to work over the web. Warby Parker embodies the creative potential of great experience innovation, from the $95 price, to the donation of glasses to those in need for every frame purchased.

Even traditional players see that innovating the experience creates real rewards. Progressive recognized that insurance can be a boring arm’s-length relationship until you have an accident, where its on-site accident assistance provides huge relief in a stressful and unfamiliar situation. In each case, these companies redesigned the customer experience — not just the traditional product features — to address unmet needs, create “talk-worthiness” and drive differentiation and growth.

By opening the product lens to take a broader view, each of these companies discovered adjacencies that wrap around their products or services to create an immersive environment. These companies have mastered a new discipline that we refer to as “experience innovation.” They are taking a broader view of their customers’ lives and how they interact with products to create new and unexpected “signature” moments. These experience innovators are solving customer problems in a way unique to their brands, with a rich array of experiences that surround and connect to the core offer. Increasingly, experience innovation trumps product innovation.

To learn more, download the report.

Experience Innovation