When Procter & Gamble wanted to test its new shaving innovation, a heated razor for its Gillette brand, it chose what until recently would have seemed an unusual route. Rather than holding focus groups or sending out surveys, it turned to crowdfunding platform Indiegogo.
The product aims to reproduce the experience of a hot towel shave at a barber by adding a “warming bar” that heats the razor cartridge. It is the brainchild of the new GilletteLabs team, which is tasked with “reinventing the way men look at shaving” using technology.
“[GilletteLabs] is not about making the blades sharper or taking away or adding a blade. It is moving into different territories – how to innovate from the razor outwards,” Andras Papp, head of communications for Gillette & Venus in EIMEA, tells Marketing Week. “We just started to think outside the usual shave experience.”
He adds: “From the shave closeness and comfort we are moving now into more of the shave experience territory.”
But why launch a crowdfunding campaign? Sites such as Indiegogo and Kickstarter have become popular among entrepreneurs and activists looking for ways to raise cash for their ideas and causes. P&G clearly doesn’t need the money and most consumers would baulk at ‘funding’ a major company.
The idea for P&G, however, was not to raise money for a new product but to test demand. The razor had already been in development for two-and-a-half years when its Indiegogo campaign launched so the company was pretty sure it had hit on a worthwhile innovation. What it needed to do next was raise awareness and interest, and gain feedback ahead of putting the product into production.
When it comes to innovations that are a bit different to our standard concept and products aimed at different audiences, we believe we can learn a lot from taking our idea to an audience base that is eager to engage.
Kari Vinther Nielsen, Lego
“We had a pretty good prototype, close to mass production, and we thought it was a good idea to reach out to hardcore grooming enthusiasts and Gillette fans, put this product in their hands and really hear back from them first-hand,” explains Papp. “There is a scale opportunity, obviously, because we have almost 1,000 razors out there and this one-on-one conversation we can have with the really enthusiastic group is something interesting.”
Gillette initially hoped to sell 250 heated razors at a price of $109 (£85) for the handle (a discount on the $150 it will likely charge when it launches) and $20 for a pack of four cartridges. But within a week of the campaign going live they had all been sold and in the end P&G shipped 1,232, almost six times as many as it previously planned.
“[They were] gone in a week,” exclaims Papp. “That tells the story. We had different timelines and thoughts but this went beyond our hopes.”
Procter & Gamble is not the only major brand turning to crowdfunding to test demand and conduct market research. Last year, Lego launched a pilot project, Lego Forma, using Indiegogo to test the appetite and market for a product aimed squarely at adults. But, unlike P&G’s heated razor, which was in the late stages of development, Lego is keen to test new concepts and validate ideas.
The hope is that by taking a more open approach to innovation it can de-risk and accelerate product development, while reaching new audiences.
Kari Vinther Nielsen, senior marketing manager at Lego’s Creative Play Lab, explains: “The strong relationship we have with our adult fans provides crucial insight into what our older audience is looking for in more traditional Lego products and experiences but when it comes to new innovations that are a bit different to our standard concept and products aimed at different audiences, we believe we can learn a lot from taking our idea to an audience base that is eager to engage in open innovation and discussion.”
Moving faster is also a priority at Coca-Cola. The drinks company used Indiegogo to test interest in bottled water brand Valser. Unlike Gillette and P&G, which were both looking to sell a set number of units, the Valser campaign aimed to raise $10,000 with “perks” given to those who donated based on how much they donated ($20 got people a four-pack of Valser, $5,000 100 cases).
George Parker, Coca-Cola’s innovation director, says the campaign helped the company gauge interest and bring it to market faster. “Given how rapidly consumer tastes are changing, the innovation team at Coca-Cola is challenged with taking risks, testing, iterating and cycling through ideas quickly to see what works. Indiegogo was an opportunity to quickly get Valser out there and see if there was demand.”
Understanding the market opportunity for a product comes through raising money or selling units, but also through direct feedback with consumers. For brands such as Gillette and Coca-Cola, which usually have little first-party customer data, this can be invaluable.
Not only do they get information on the demographics and interests of the people that have donated to the campaign, but they can go back to them to find out more information and get detailed feedback on the product.
Indiegogo CEO David Mandelbrot explains: “Because of the way many major brands sell, maybe through a distributor, at least a retailer, major brands don’t have a direct connection with their customers. As a result, it makes it harder for those brands when they’re developing a new product and they want to get feedback or when they want to get input from customers about their product. It makes it very hard for them to have a two-way dialogue with the ultimate consumer of their products.”
Gillette, for example, asked those that had supported the Indiegogo campaign to “tell us a little bit more about yourselves” through an emailed survey, followed up by another survey on their initial thoughts about the product, and a final one after a month of using it. In return for filling out all three, respondents received a free four-pack of cartridges.
Connecting with a community
Coca-Cola’s campaign also enabled it to tap into the wider Indiegogo community, following up with those who bought Valser and those who didn’t, to find out why and refine the product.
“Using a platform like Indiegogo allows brands to connect with a passionate community of backers in an authentic way,” says Parker. “Using pre-order transactions as a new kind of real-world validation to learn what people actually want – and then using those insights to bring product to market – unlocks a lot of opportunity for the company, as we look to ‘lift and shift’ more of the 300 beverages that the Coca-Cola Company makes, but are not sold in the US.”
While there are clear opportunities for brands in using crowdfunding platforms, there are some pitfalls to be wary of too. There is sensitivity around big brands asking people for money, hence why Indiegogo allows them to set a target of units sold rather than money raised.
There’s also a risk in putting products that aren’t quite finished and concepts that haven’t been fully tested in the public domain and the hands of consumers. If they don’t work or the reaction is bad there can be negative blowback on the brands.
Yet if brands want to stay on top of market trends, remain relevant to consumers and appeal to new audiences, this move to faster innovation and getting more insight from brand enthusiasts and first adopters will become ever more important. Crowdfunding cannot replace rigorous research and development, or detailed market research. But it can be a new way to refine and develop, build one-to-one relationships with brand fans, and validate ideas – and in some circumstances restate the role of a brand in people’s lives.
“[Crowdfunding confirmed] Gillette is still a very strong brand among men and that if you come with an innovation guys really do listen, which is a great feeling that they even want to be part of the innovation process,” concludes Papp.