Unleashing Innovation Under Limitations: Edgewell and Ford's Unprecedented Success

In the face of ongoing challenges such as unrest and shifting consumer trends, legacy marketers are finding it increasingly difficult to successfully innovate. This is particularly true in the wake of emerging generations such as Gen Z, which has heightened the demand for exciting new products.

At Advertising Week New York, representatives from Ford Motor Company and Edgewell Personal Care shared their strategies for navigating these pressures and constraints. They emphasized the importance of contingency planning at every stage of the lengthy development processes often required for innovation. This discussion comes at a time when the CPG industry is grappling with price hikes due to inflation and the auto industry is facing complications from the United Auto Workers strike, leading to layoffs at Ford.

Camilla Medeiros, the vice president of global innovation and insights at Edgewell, a company that markets brands such as Schick, Playtex, and Banana Boat sunscreen, highlighted the constraints affecting the pricing and launch of a product. Additionally, Medeiros emphasized that these constraints have become even more complex in recent times.

Uncovering wins

Due to various factors, such as the pandemic, marketers have started exploring opportunities beyond their domestic market. To tap into this trend, Edgewell introduced the concept of "dermaplaning" to the American market through its product called Schick Hydro Silk Touch-Up. Dermaplaning, widely popular in countries like Korea, involves the use of a small razor to remove hair and exfoliate the skin. The increased interest in dermaplaning in the U.S. can be attributed to the pandemic, as people spent more time looking at their faces on screens.

“That innovation was non-existent in the U.S. until a few years ago and it has gained significant popularity,” stated Medeiros. “We have been able to successfully expand it by capitalizing on a trend that we identified and addressing a consumer need that we observed, particularly during the COVID pandemic.”

The emergence of new media platforms can be both beneficial and challenging. As reported by The Wall Street Journal, shopping trends influenced by TikTok have sped up the pace of research and development, creating pressure for marketers. However, a successful TikTok campaign can result in a product flying off the shelves, as demonstrated by the Schick Hydro Silk Sugar Wax Roller. This at-home hot wax product was conceived during the pandemic when the closure of salons was widespread, and it gained attention through engaging and instructive TikTok videos.

“We managed to launch in about a year or possibly even less,” disclosed Medeiros. “We completely sold out through all of our retail outlets, Walmart and Target included. It was a delightful and unforeseen breakthrough. We recognized a demand and the timing worked in our favor, yet we were truly astounded by the shift in consumer behavior.”

Accepting failure

During the discussion, one recurring point was the acknowledgement that many innovative ideas may not succeed. However, the willingness to embrace risk differs across industries. For example, consumer packaged goods (CPGs) companies that regularly sell low-priced products have a different perspective compared to car manufacturers, whose vehicles are typically the second most expensive purchase after homes for consumers.

Jennifer Brace, the chief futurist at Ford, explained that it often takes around five years for a concept to materialize and become a tangible product. By the time their products reach the market, they no longer feel like risky ventures due to the extensive research involved in their development.

Both brand representatives stressed the importance of long-term thinking and advised other departments to avoid relying too heavily on a single strategy. Alongside having backup plans in place, contingency planning should also include multiple alternative courses of action.

"We often describe ourselves as the courteous contrarians. At times, we may dampen their enthusiasm," Brace remarked.

Edgewell tackles the constraint factor by adhering to the "fewer, bigger, better" principle, according to Medeiros. Every year, the company receives a fixed advertising and promotional budget and must prioritize the areas that will drive growth. However, this process is complicated by the CPG's intricate relationship with retailers.

"It may sound straightforward to focus on fewer, bigger, and better innovations, but it is not always translating into successful outcomes because there are varying needs at the retailer, consumer, and market levels," Medeiros explained.

Fending off disruption

In addition to external factors such as the economy, traditional marketers also face competition from disruptors. Even before the COVID era, direct-to-consumer (DTC) newcomers like Harry's and Dollar Shave Club had already disrupted the market for male shaving products, eroding the market share of established brands such as Schick from Edgewell and Gillette from Procter & Gamble (Edgewell attempted to acquire Harry's in 2019 but was blocked by the Federal Trade Commission a year later, while Dollar Shave Club has been owned by Unilever since 2016). Meanwhile, Ford has increased its focus on electric vehicles due to the rising popularity of Tesla.

Medeiros acknowledges that all the categories we compete in have experienced disruption to varying degrees and at different points in time. It has been learned that it is not possible to surpass them. Gillette, despite being backed by P&G's deep pockets and resources, couldn't outperform Dollar Shave Club or Harry's.

Nevertheless, Medeiros believes that traditional consumer packaged goods (CPG) brands and direct-to-consumer (DTC) companies have the potential to establish complementary relationships. While DTCs excel in creating digital business models that attract young consumers, they often lack the expertise and connections necessary to enter the brick-and-mortar retail space. In 2021, Edgewell successfully acquired Billie, a women's shaving line, for $310 million.

“You just have to learn to compete with them or you acquire them,” said Medeiros of DTCs.