Innovation Treasure Hunt by Michael J. Silverstein
Michael J. Silverstein in "Trading Up" conceptualized the "new luxury" paradigm shift driving today's consumer shopping habits - paying high prices for goods and services that are appealing, cool and emotionally satisfying including shoes, golf clubs, music, home, food at fancy restaurants, beauty products and more.
In his new book, "Treasure Hunt", Silverstein with John Butman shows that the same consumers are not only buying at Victoria's Secret and Panera, but also are going to Costco and Home Depot and getting the same emotional satisfaction. In essence, shopping has become fun and rewarding, an adventure, a "Treasure Hunt". One reason for this: the growth of both low-end and high-end consumer categories and innovations in goods, services, designs, marketing and selling.
Silverstein notes that on the one hand a consumer buys a venti latte at Starbucks (NASDAQ: SBUX) for $5, on the other brews coffee at home for 40 cents, and uses the savings to buy an Apple Nano (NASDAQ: AAPL). How can a business target both the high-end and low-end consumer? How do innovators such as eBay Inc. (NASDAQ: EBAY), Dollar General, H. E. Butt (H.E.B stores), Commerce Bank, Tchibo, Aldi, Bath and Body Works, McDonalds, and more cater to the "bifurcated consumer market"? It's a double-edged sword - the offering has to be exciting enough for "trading up", or enough of an emotional bargain to go "treasure hunt." Anything in the middle is a treacherous fall.
Silverstein provides a detailed process for continued consumer-driven innovation. The process requires a detailed prework that includes mapping the competitive landscape, determining the consumer dreams, dissatisfactions and anomalies, global patterning, cost structure breakdown, and moment of truth diagnostic. If this sounds too complex, Silverstein provides a simple yet ingenuous checklist of five questions whenever he is out shopping and looking for new products:
1. Does the product clearly have technical, functional and emotional benefits?
2. Is there a clear consumer target?
3. Is the product displayed in a store in such a way that consumer would describe it as "stunning"?
4. Is there a pattern of continuous innovation?
5. Is the consumer fundamentally engaged in such a way that she wants to say "Yes"?
Silverstein observes several changes contributing to the growth in bifurcation of consumer market – high-end and low-end – over the next decade. Finally, the author provides a six-step call to action for the innovators to lead, innovate and grow:
1. Don't wait for the market to move. Be ahead of the curve.
2. Engineer out dissatisfactions in your product.
3. Hunt for value in the trade-up and trade-down segments of your market.
4. Inspire a continuous search for cheaper, better, more value...and better, better, better.
5. Attack the category like an outsider who is looking at a blank sheet.
6. Pursue the market with energy and relentlessness.
Apple, Starbucks and eBay are 3 of the top 20 innovators of The Innovation Index.
References:
Treasure Hunt - Inside the Mind of the New Consumer - Michael J. Silverstein with John Butman
In his new book, "Treasure Hunt", Silverstein with John Butman shows that the same consumers are not only buying at Victoria's Secret and Panera, but also are going to Costco and Home Depot and getting the same emotional satisfaction. In essence, shopping has become fun and rewarding, an adventure, a "Treasure Hunt". One reason for this: the growth of both low-end and high-end consumer categories and innovations in goods, services, designs, marketing and selling.
Silverstein notes that on the one hand a consumer buys a venti latte at Starbucks (NASDAQ: SBUX) for $5, on the other brews coffee at home for 40 cents, and uses the savings to buy an Apple Nano (NASDAQ: AAPL). How can a business target both the high-end and low-end consumer? How do innovators such as eBay Inc. (NASDAQ: EBAY), Dollar General, H. E. Butt (H.E.B stores), Commerce Bank, Tchibo, Aldi, Bath and Body Works, McDonalds, and more cater to the "bifurcated consumer market"? It's a double-edged sword - the offering has to be exciting enough for "trading up", or enough of an emotional bargain to go "treasure hunt." Anything in the middle is a treacherous fall.
Silverstein provides a detailed process for continued consumer-driven innovation. The process requires a detailed prework that includes mapping the competitive landscape, determining the consumer dreams, dissatisfactions and anomalies, global patterning, cost structure breakdown, and moment of truth diagnostic. If this sounds too complex, Silverstein provides a simple yet ingenuous checklist of five questions whenever he is out shopping and looking for new products:
1. Does the product clearly have technical, functional and emotional benefits?
2. Is there a clear consumer target?
3. Is the product displayed in a store in such a way that consumer would describe it as "stunning"?
4. Is there a pattern of continuous innovation?
5. Is the consumer fundamentally engaged in such a way that she wants to say "Yes"?
Silverstein observes several changes contributing to the growth in bifurcation of consumer market – high-end and low-end – over the next decade. Finally, the author provides a six-step call to action for the innovators to lead, innovate and grow:
1. Don't wait for the market to move. Be ahead of the curve.
2. Engineer out dissatisfactions in your product.
3. Hunt for value in the trade-up and trade-down segments of your market.
4. Inspire a continuous search for cheaper, better, more value...and better, better, better.
5. Attack the category like an outsider who is looking at a blank sheet.
6. Pursue the market with energy and relentlessness.
Apple, Starbucks and eBay are 3 of the top 20 innovators of The Innovation Index.
References:
Treasure Hunt - Inside the Mind of the New Consumer - Michael J. Silverstein with John Butman
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