INNOVATION-DRIVING HUMAN RACE

“Scarcity is the father of creativity.”A very apt statement for the Indian economy which is plagued by low sales potential and widening fiscal deficit with the Reserve Bank Governor, Mr. D. Subbarao swearing never to part with the CRR. Amidst all the liquidity problems, retailers in India decided to have an extended spring –summer discount season ending only in first weekend of September. In the luxury space, a 'silent sale' has been on, with brands such as Jimmy Choo, Burberry, inviting their loyal high net worth customers to an irresistible sale, with discounts ranging from 30% to 50%. In Big Bazaar, salespersons scream the rates of various products, during the “Mahabachat sale” period, to create an ambience similar to that of a local mandi.

Innovation drives the retail industry, and is clearly the logic behind differentiated offerings. But the first mover advantage is swept away by copycat brands (Companies are like packs of sheep, if one takes the lead, others soon follow).This is the reason 3M company follows the 15%-30% rule, where each employee can utilise 15% of their paid time to harness their creative capabilities. The other policy is to ensure that 30% revenue is generated by products which came into existence in the last 5 years. Innovation is aimed at identifying the gaps between present offerings and future needs. HUL, as part of its energy sustenance, is pilot testing “Magic”, a shampoo which need not be rinsed, thus reducing usage of water. Marico Ltd. came up with Parachute Advanced Hot Oil, to cater to a women’s need to flock to salons for a steamy head massage. It changed the packaging of Parachute coconut oil from a tin to a plastic pet bottle and then to containers sustainable during all the seasons. The companies swear by the fact that needs have to be created, gaps need to be filled.

Innovation doesn’t always need huge capital investment and long gruelling hours in the R&D wing. Take Bharti Airtel, which outsources all its requirements, IT infrastructure handled by IBM and network infrastructure handled by Nokia Siemens, in turn concentrating on its core activities. Sometimes, understanding the customer’s needs or the SCARCITY, leads to innovation. Mansukhbhai Prajapati, the creator of ‘mitticool’, understood the plight of fellow Bhais and Behns who were subjected to the scorching heat without electricity. So he embarked on the journey of creating a refrigerator made of clay which runs without electricity. Same goes with the Tata Nano. Had Ratan Tata not realised the aspirations of lower middleclass Indian’s to hop from a 2-wheeler to a family size AC 4 wheeler, this concept would never have seen reality.

Consumers dream of luxury. Let’s say an Apple iphone, the sleek, stylish smart phone with an entire ecosystem of applications. But who says it will come with a hefty price. The Samsung is adorned with all tricks for disruptive innovation.