From Lipstick to Yoga Pants – Shade Extensions for Faster Time to Market

When unlocking speed to market requires more than an agile Supply Chain

Companies across the consumer goods space, from beauty & personal care to food & beverage, are trying to tame the beast that is speed to market. Brands understand that being first to market with a new product, or, at the very least, being fast enough to catch a trend, is key to winning in their category. But some brands are nimbler than others; small and indie brands across multiple segments are now moving faster than ever. With super short new product development lead times of 2 to 20+ weeks, these brands flood the market with constant new drops.

Meanwhile, large corporations struggle to cut a few weeks off an average time to market of 24 months or more. Their ability to react to trends and high levels of newness is being challenged as never before, fueled by competition, and increasing demand from consumers.

In thinking about faster speed to market, companies naturally defer to Supply Chain to “fix” operations. Of course, there is a need to revisit current processes and cut down on wasted time in the value chain where possible, but this alone won’t do it. What companies might be losing sight of are the other elements upstream in the value chain, tucked in the offices of marketing and product development departments that are also key to unlocking corporate agility: their product innovation choices.

Put simply, innovation exists on a spectrum from low to high complexity. Low complexity innovation involves leveraging readily available, existing assets in combination with some new components or minor changes to the product. This type of product innovation is more commercial-centric, built around storytelling. It allows brands to quickly (in as fast as 2 weeks) tap into an ongoing trend and drive the perception of constant newness in the market. At the opposite end of the spectrum lies high complexity innovation, which requires white space product creation. Here, a brand makes a “big bet” that takes much longer (at least a year) to be developed, resulting in an innovation that can disrupt the market.

Winning brands succeed because they balance their portfolio of innovation across the spectrum, and deliberately and strategically know when to leverage high and low complexity product innovation. Ideally, this is combined with unique ways of working that avoid lags in the decision-making process; nimble, empowered teams; and a flat hierarchy.

Winning brands also adjust their channel strategy depending on the type of innovation. Shorter innovation cycles require the ability to place products in store faster, which can pose a challenge since retailer supply chain processes vary significantly depending on industry and business model, and some are not equipped to constantly refresh products on shelf – such as big-box retailers and drugstores who have year-long refresh cycles. Conversely, longer innovation cycles allow for greater coordination with retailers and broader distribution. Yet for agile brands with frequent low complexity innovation, direct to consumer is the way forward – brick-and-mortar, but especially online, where it is easier and faster to deploy new creative assets to support the launch vs. in-store visual merchandising.

In the beauty market, brands like Kylie Cosmetics are super-efficient in driving low complexity innovation, such as utilization of a “shade extension” strategy. This strategy relies on new product launches which consist of shade extensions of existing lipsticks, released in the form of singles, duos, holiday editions, special collections, and collaborations. These launches usually combine one or more new shades with other existing shades in the same primary packaging with updated decoration or minor new components; truly new formulas are not often seen. Sales are done exclusively through their online, direct to consumer channel, and the “new” product is promoted heavily on social media.

Similar brand strategies exist in the apparel industry, where low complexity product innovation was pioneered by traditional fast fashion players like Zara and H&M. Now, brands that are traditionally less trend-driven are doing their homework and adopting shorter innovation cycles to maintain their relevance in the market. Nike, for example, recently announced in an email to customers that they were releasing “the latest shade” of a pair of yoga pants in a new “purple dawn/gunsmoke” shade and warned customers “not to miss a color update” – a testament to the “shade extension” strategy gaining traction outside of the beauty space. These low complexity innovation strategies allow brands such as Nike to sustain fast-paced product turnaround and a consumer perception of constant newness.

The challenge ahead for big brands to become more agile is not an easy task. Building an agile supply chain is as complex as it is undeniably important. Equally important is that brands are strategic in their product innovation choices and are aware that each choice involves a tradeoff between level of innovation and speed to market. If they want to step change agility, brands must create a balanced portfolio that leverages low complexity innovation as much as possible while opting for fewer and (truly) bigger bets. In today’s game, brands have no choice but to absolutely get this right.

Co-authored with Flavia Carvalho