Boston Consulting Group (BCG) lists two factors that lead to products being substitutable (aka commoditization): the emergence of a standardized design or technology in the marketplace and an increase in transparency when it comes to product features and price.
Thanks to these factors, more and more companies are cornered into fighting an uphill battle against commoditization. But not all hope is lost. There are still ways for companies to surprise the consumer in a way that allows them to break out of the perceived uniformity.
Here are 3 examples of companies that are innovating in commoditized markets:
How do you choose the wine you buy? I have to be honest and say I have no earthly idea about what makes a wine good, let alone individual brands (okay, I do know Franzia), but there is one brand that has quickly become a talking point amongst friends and colleagues: 19 Crimes.
This wine brand references the crimes that would result in a sentence of transportation, a dangerous journey for convicts from Britain, to what we now know as Australia.
The backstory would be intriguing enough on its own, but each bottle features an image of a convict, and by using the Living Wine Labels Augmented Reality (AR) app, allows users to hear the narratives of the featured criminals, right from their mouths.
It looks like the feature has worked well. As of 2017, Better Retailing stated the brand saw an impressive increase of 60% in total volume sales and 70% in brand value.
Now, other brands are hitching onto the bandwagon, as can be seen by these Walking Dead themed wines having similar interactive AR labels. This time with the zombified walkers breaking out of the labels; or interacting with another label’s character.
Buying online comes with its pros and cons. On one hand, you have the convenience of not leaving your house and possibly getting better prices, but on the other, there is the danger of not knowing if you love an item until you receive it, and if you don’t, having to return the item could turn into a hassle.
These issues are intensified when purchasing furniture. It’s not easy mailing back a dresser or a couch!
As one of the world’s leading online retailers for furniture, Wayfair released a method for customers to try out their purchase. Using the “View in Room 3D” on their mobile app, the piece of furniture can be placed into whatever space the user wants, allowing them to make sure that the style, shape and size fits in with the existing decor.
The technology comes from using ARCore, Google’s augmented reality platform, and Wayfair’s integration into their app increases the customer’s experience while also decreasing the risk of regretting their purchase.
TechCrunch’s Sarah Perez quotes Wayfair’s co-founder and co-chairman Steve Conine on Wayfair’s approach to AR:
“We knew early on that augmented reality had the potential to completely transform the way people shop for their homes, and as it’s quickly moved toward mainstream adoption, we’re excited to have played an integral role in shaping the experience for millions of shoppers…”
It’s clear that Wayfair puts effort into anticipating ways to improve the customer experience, as they also offer web-based clipboards, mobile messaging, as well as a visual search engine in addition to AR. But it’s clear their investments haven’t gone unnoticed.
Out of the hundreds of brands to buy glasses from, one has made a name for itself based on being stylish, affordable, philanthropic, and customer centric: Warby Parker.
The company makes a point to connect with customers as well as adapting to the customers’ changing needs. To see an example, look at the evolution of their online shopping experience.
Originally, Warby Parker allowed users to use a Virtual Try-On booth, similar to the AR technology the previous companies have adapted, where customers uploaded a picture of themselves to try out the frames.
However, trying on something as personal as glasses has a huge amount of risk for disappointment. There are so many ways the fit could go wrong that a picture just cannot capture.
To answer that, Warby Parker evolved and now personalizes the shopping experience through a quiz that asks about the customers’ style, head shape, and preferred colors to match them with frames.
From those matches, you can select up to 5 pairs to try for 5 days with shipping handled completely by Warby Parker.
By allowing customers to try on the frames and wear them, get other’s opinions, and feel how they fit on their face, an attachment gets created. An attachment not just to the product, but to the company.
I’ve had glasses since I was 7 years old. At 25, the excitement of picking out new frames has faded completely. But as I browsed the site, then took the quiz and selected my favorite 5 frames, I became enthralled with the idea of creating a new me.
The feeling of dread and boredom replaced with anticipation. I can’t wait to try on the frames and see how they fit.
Transforming an otherwise dull engagement into an exciting experience is something companies of all sizes struggle to achieve. But here Warby Parker, not even a decade in business, has been able to do just that by innovating and refusing to rely on technology alone to get their customers’ engagement.
Each of these companies has adapted technology in a way that adds value to their user. Each method is not restricted to the respective companies, but imitation is not enough to achieve the same success. At the core of their innovations is customer centricity, which is indispensable in all industries, but particularly those that suffer from commoditization.