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In the 1970s, there were only two types of Colgate toothpaste. But as competition increased, Colgate’s sales started to slip. So the company introduced a new product that included a new feature, the addition of fluoride, perhaps. Then another. Then another. Whitening. Tartar control. Sparkles. Stripes. Each innovation certainly helped boost sales, for a while at least. And so the cycle continued. Guess how many different types of toothpaste Colgate has for you to choose from today? Thirty-two. Today there are thirty-two different types of Colgate toothpaste (excluding the four they make for kids). And given how each company responds to the “innovations” of the other, that means that Colgate’s competitors also sell a similar number of variants that offer about the same quality, about the same benefits, at about the same price. There are literally dozens and dozens of toothpastes to choose from, yet there is no data to show that Americans are brushing their teeth more now than they were in the 1970s. Thanks to all this “innovation,” it has become almost impossible to know which toothpaste is right for you. So much so that even Colgate offers a link on their Web site called “Need Help Deciding?” If Colgate needs to help us pick one of their products because there are too many variations, how are we supposed to decide when we go to the supermarket without their Web site to help us?<\/p>\n\n\n\n
Once again, this is an example of the newest set of shiny objects designed to encourage a trial or a purchase. What companies cleverly disguise as “innovation” is in fact novelty. And it’s not only packaged goods that rely on novelty to lure customers; it’s a common practice in other industries, too. It works, but rarely if ever does the strategy cement any loyal relationships.<\/p>\n\n\n\n
Apple’s iPhone has since replaced the Motorola RAZR as the popular must-have new mobile phone. Removing all the buttons and putting a touch screen is not what makes the iPhone innovative, however. Those are brilliant new features. But others can copy those things and it wouldn’t redefine the category. There is something else that Apple did that is vastly more significant. Apple is not only leading how mobile phones are designed, but, in typical Apple fashion, also how the industry functions. In the mobile phone industry, it is the service provider, not the phone manufacturer, that determines all the features and benefits the phone can offer. T-Mobile, Verizon Wireless, Sprint, AT&T all dictate to Motorola, Nokia, Ericsson, LG and others what the phones will do. Then Apple showed up. They announced that they would tell the service provider what the phone would do, not the other way around. AT&T was the only one that agreed, thus earning the company the exclusive deal to offer the new technology. That’s the kind of shift that will impact the industry for many years and will extend far beyond a few years of stock boost for the shiny new product.<\/p>\n\n\n\n