NEW YORK: Brand owners need to "standardise", "prioritise" and "mechanise" to derive the maximum benefits from effective and rapid innovation, the Boston Consulting Group has argued.
The consultancy assessed 34 firms in the FMCG sector. It awarded the average company 3.2 points with regard to getting new products to market, on a six-point scale where lower scores were favourable.
One strategy that the research suggested is essential for successful R&D was the "standardisation" of processes and procedures, and in this area totals came in at a mean of 2.9 points.
"Prioritisation", such as streamlining systems and boosting the funds allocated to certain vital projects, was equally important, and the featured businesses received three points here.
However, "mechanisation" - like the adoption of digital tools, common metrics and in-house knowledge sharing resources - constituted the weakest field of performance, yielding four points.
Brand owners with the best results - generally excelling in each of the three disciplines - usually took 15 months to complete the R&D cycle, versus an industry norm of 22 months.
The beauty category contained the most dynamic enterprises, whereas firms in more regulated segments like tobacco and alcohol typically endured a much longer timeframe before rolling out new lines.
Overall, Zara, Inditex's fast-fashion chain, recorded the strongest rating, with a lead time of roughly two weeks, compared with the figure of ten months for its industry and 30 months for some members of different sectors.
Similar trends were apparent when renovating or reformatting products, with the "speed champions" turning around refreshed offerings in just five months, measured against 15 months as an average.
Upon discussing promotions and discounts, the norm was a seven month period to get an idea from inception to availability in stores, but the premier organisations achieved this in one month.
Looking at sales, BCG's "speed champions" also generated 1.6% of revenues from their "blockbuster" innovations per year, bettering the 1% for players that were less nimble.
"Increased agility allows companies to satisfy the rising expectations of increasingly mobile customers - and to react quickly to competitive moves," BCG added. "Above all, speed can boost the company image and even increase employee satisfaction."
Data sourced from Boston Consulting Group; additional content by Warc staff