11 avril 2014

“Products are yours” – The offering strategy of Auchan with Quirky


What is the common point between a perfect tea maker, stackable glass, and lights for keyboard? You don’t see it? 
Well they all came from the mind of a consumer like you and me. And they all came to reality and are sell through the social community Quirky. Conscious of the huge potential of this platform Auchan recently form a partnership with them. The firsts Quirky’s products should be in the shelves this spring. Focus on a promising innovation.




The importance of being innovative when you’re a retail chain.

Since the first store opened in Roubaix in 1961, Auchan has become one of the leading retailer worldwide. Present in 12 countries with over 170,000 employees, the Auchan group, led by the Mulliez family, generates a turnover of 41 billion €. Hypermarket sector represents 78% of the turnover of the group. Hypermarket was recognized as a temple of modern consumption. Nowadays hypermarket has lost its dynamism and some of his followers indeed turnover of Auchan France declined by 2.6% in 2013. Auchan opened in 2000, the “drive”. It has really took 10 years to take off. In parallel, the rise of local shops won 2 million customers in France (figure Kantar-IFLS).
Gigantism and distance have become the main weaknesses of the model. Some consumers feel they have better things to do than waste 2 hours in a department store too, and too far from their homes. That’s why Auchan has chosen to import Quirky products to offer its customers everyday products truly innovative and attractive. On this exclusive partnership, the creation is at the heart of the launch of Quirky Auchan. Quirky today provides over 300,000 individuals contributors and inventors to meet and create a product via an online social network. 

Innovation 2.0, by Quirky.

Quirky has an international online community of more than 10,000 members. Basically the customer will propose his ideas to the site. The other members will give their suggestions and enhancements to that idea in the site. Quirky is getting almost 3000 ideas per week, from that only 3 ideas are being selected for the evaluation purpose. There are two possibilities in the evaluation desk if it is get selected then Marketing research, design and naming of the product will be done, otherwise it will get rejected. Then to create the product, Engineering and concepts are being made. After that the study of market for the product is done. Now, according to the engineering and concepts the product will be made in the production unit. Then the product will be made visible in online stores and also some of the international super markets. Once the product is being sold, 10% - 30% of the benefits are given to the inventor of the idea as well as the members who are all contributed in this innovation. Last year Quirky paid $3.8 billion to its inventors and members who are all influenced it over online.
Product innovation means different things to different people.
Quirky bring infinity of new possibilities. And they let us dream nicely about our future with those. From simple items to complicated ones. Quirky makes products like electronics and power, health and fitness, kitchen. For e.g.: Six pivoting outlets accommodate plugs and chunky adapters of all shapes and sizes. Fill every outlet with any plug—all at once. Yet those are mainly incremental innovation, but maybe one day the community will be able to truly revolutionize the world. The creation process is brand new in the business, and need a lot of flexibility. This combination of facilities, skills and technologies that are used to produce products needs to be rethink for every projects. The strongest ideas are well researched, easy to understand, build them with modern technology. Each week, ideas are received. Before it does though, it has to go through a staff and community review process. Quirky probably won’t subsidize to a R&D department but for sure it can create products and bring ideas that a R&D department would never came up with.
Beyond those frontlines innovation, we must not forget the background innovation, which is the base of Quirky: Human resources. Working on so many different projects with the will of making dreams of people came true and adapt to all the news conditions is like creating a new company per products. (And there are 3 new products per week!) That’s really stressful and so Quirky introduced the voluntary company black-out. In average every 3 months, but actually whenever they feel their employees to much stress they completely shut down the company for a week and ask them to do anything but not working.

To manage 450000 inventors, really?

This black out is part of a solution of a deeper issue. How to manage that many inventors? Virtually the company is not only an hundred employees that they manage but several hundreds of thousands, and for a very few of concrete results. The French community is made of 450 000 people all seeking to be the next Quirky inventor, among them less than 400 have seen their idea became a real product, and only 4 products will be sell on the Auchan’s stores. Will the French people still trying over and over to create a new product when basically the chance to see it become real is 1/1 000 and the chance to see it on the shelves is only 1/100 000? We should not forget that taking a chance cost 7 euros each time. Maybe Auchan is currently just shyly trying a new concept and will increase the rates and will face this. Still there is a possibility of seeing the French community giving up Quirky. We must not forget that French people are less risk taker than American. There the chance of an idea become a real product is 1/250, but we don’t know how the rate of products that are actually push on the market.

A strategic communication asset more than an innovation bringer?

According to Kotler’s definition marketing is:” The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit”. But here marketing changed is to create products according to customer’s imagination beyond any consideration for the needs. The relationship between the consumer and the company is no more only a buyer/seller relationship the customer become an entrepreneur and the customers will feel like that they are the part of company and will create an emotional bound to this one. When we see the shyness of Auchan to put new Quirky’s product in its shelves, we can assume that the bound with the consumer is probably the main asset that Auchan is seeking in that partnership with Quirky.
by
Reda El Ouarzazi , Arthur Guéna, Abhishek Maddi, Canida Pinto , Kiran Shivanna et Dinesh Subramanian - Esc Pau MBA franco-Indien - Avril 2014.

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