A Guide to Direct-to-Consumer Innovation

So you’ve noticed the writing on the wall, and the benefits of a DTC model are lookin’ pretty good (we think so, too). Now it’s time for a game plan, and luckily, we know just where to start. Our innovation process helps leadership teams reduce risk and arrive at the right solution—in fact, our process has proven so successful that it’s now taught at Vanderbilt University. We could write a book on this process (and maybe we will), but for now, we’ve condensed it for you below. Promise not to give away all of our secrets? Alright. Read on.

1. Identify your constraints.

The biggest hurdle you’ll find when you get started is not going to be a lack of desire to improve, but a network of resistance—there's going to be a whole web of circumstances in place that stonewall innovation. When we partnered with a jewelry brand that was exploring an entirely new way to sell after 25 years using the same channels, the question they needed to consider was not “How do we get better at innovating?” Instead, in the words of our friend/partner Dave Owens (Professor of Innovation at Vanderbilt University), they needed to ask themselves, “How can we stop the stopping?” Well, the first step is to identify those stopping points, or constraints, and tackle them head-on.

Pinpointing the constraints stopping you from innovation is tougher than it might sound—big questions that need solving will bubble up, and that will feel tedious. But innovation lives in the answers to those daunting questions. Here are the 6 main types of constraints according to Dave Owens (and questions to help you move past them):

1. Individual Innovation Constraints
   "How do I have better ideas?"
2. Group Innovation Constraints
   "How do we support experimentation?"
3. Organizational Innovation Constraints
   "How do we execute and scale?"
4. Industry Innovation Constraints
   "How do we compete in the market?"
5. Societal Innovation Constraints
   "How does it make use better?"
6. Functional Innovation Constraints
   "How do we make it function?"

Do any of these categories sound familiar? Maybe one of those questions has been keeping you up at night—trust us, anyone who’s ever attempted to innovate has been there. But getting a clear picture of what’s causing your “stopping” is a critical first step to starting.

2. Inventory Your Assets.

Now for the good news. There’s a really good chance that you already have all the ingredients necessary to innovate. And as an established company with experience on your side, you probably have more tools in your box than you realize. We bet you’ll even realize that no one is more equipped to disrupt an industry than its own leaders.

What does this look like in action? redpepper is a longtime partner to Mars Petcare, having worked across their dog food portfolio to help them innovate from within. When we partnered with them to launch DTC brand Puppo, it quickly became clear that a company of their size and stature had the unique assets needed to set them apart from competitors. From brand recognition and an established customer base to an extensive database of historical data and advanced technology, this industry leader had all of the ingredients necessary to add a DTC brand to their portfolio—it just made sense.

3. Establish your goals.

If you’re going to commit to innovation, especially when it involves adding a DTC sales model to the mix, your team will need to get really honest and clear about your goals. The definition of successful innovation isn’t a fail-free pet project that changes for the sake of change. Spoiler alert: sometimes the answer you need to achieve your goal is “don’t do it"—saving money and reducing risk can be as valuable for the organization as revenue goals.

Instead, successful innovation looks like a long-term commitment to a process that guarantees valuable learnings. And it’s ok to fail along the way—in fact, experimentation and iteration are key components to a successful innovation process. Mars Petcare came to us with a goal to create a unique shopping experience without alienating their retail partners (after all, successful omnichannel sales means that your strategies should work in tandem). We helped them break down their true goals to make sure we never ended up with a flashy, expensive solution that wasn’t going to solve their core objective.

4. Identify the white space.

You’ve inventoried your assets, and you now understand the cards in your hand. Use your direct and indirect competitors as inspiration—is there an audience, channel, or experience being ignored? In the early stages of Puppo, the Mars team scanned its room of competitors and asked themselves this same question. While the market was growing when it came to high-end, niche dog food brands attempting next-generation, personalized shopping experiences, the same couldn’t be said for dry dog food products aimed at a mass audience. There was only one big competitor attempting to innovate in the dry, premium kibble space, and they weren’t attempting a next-gen DTC experience. Lightbulb—that’s a white space.

Focusing on personalization and a unique use of owned data, we helped Mars create a next-gen experience for Puppo that helped them enter a way bigger market than any of their innovating competitors. Quizzes provided tailored nutrition recipes unique to the dog’s needs and created a feeling of individuality with every bag. We even tested and optimized the length of the quiz so customers felt that level of personalization without feeling overwhelmed. And we used natural language AI to pull off unique communication—taking that personalization to the next level.

5. Identify the pain points.

Empathy has a special place in our innovation lab. The ability to put yourself in the mind of your customers—and identify both hiccups and major red flags along their journey—is valuable beyond measure. Too often, brands think they understand their customers, but they’re missing valuable insights that could provide them the opportunity to remedy the real issues keeping their audience from the best possible experience.

As a subscription-based DTC brand, Puppo needed a deep understanding of the most common reasons consumers cancel subscriptions. We discovered that the biggest risk of dog food subscription drop-offs was likely to occur during periods of transition. When a dog’s age, weight, or dietary needs change, the owner is likely to pull the plug on a dog food subscription that no longer meets their pet’s changing needs. Our solution? Ditch the one-size-fits-all recipe, and use Mars’ data to anticipate these transition points—proactively suggesting changes to the formula as the dog grows.

6. Ideate, prototype, and test.

It’s a common misconception that if you simply get creative people in a room, they will be creative. We have found that process is the secret weapon for ideation—and it’s driven by those not-so-bigand-scary constraints we talked about. We operate under a cycle of divergent and convergent thinking that removes as much bias and room for “stopping” innovation as possible.

Once you ideate, it’s time to put those ideas to the test. Prototyping your best ideas doesn’t mean getting them market ready in a day—a prototype could be as simple as a sketch or as complex as a clickable wireframe. In order for people to respond to innovation, it can’t simply be imagined. It needs to be experienced. Think about Henry Ford. A faster horse might’ve solved his customers’ problems, but people’s imaginations are limited by what they’ve seen done before (and he proved there is much to experience beyond the status quo).

Once you rinse and repeat Step 6, you’re sure to land on a consumer-validated DTC solution that’s best
suited for your business and your customers. Interested in learning more? Get in touch.