Sweeping innovation under the carpet
By David MacGregor,
New ideas, however radical, are always better than doing nothing
[Advertising]
The future of iconic New Zealand brand Feltex is in the hands of the receivers. It won’t surprise me (writing in late September) if it ends up in a fire sale to Australian competitor Godfrey Hirst. Without being unduly callous towards the people employed by Feltex, the fate of the company was probably inevitable, sooner or later.
Putting aside debates about the prudence of the management or quality of governance, the most significant issue facing companies like Feltex is that their practices and processes seem moribund. Where is the innovation?
Examining the website (and its competitors), nothing differentiates brands of carpet. Much is made of the aesthetic design element—colours and patterns—but other than the baffling arrays of swatches I am at a loss to figure out why I should choose one carpet over another. Other factors such as the pile, the underlay, fire retardation … all simply make me want to satisfice—pick a general colour/pattern, a price I can afford and leave the rest to people with ‘fluff in their veins’.
Most ‘specifier’ brands face the same gloomy predicament. The consumer can’t tell the difference between wallboards or sound-baffling insulation or cholesterol-lowering medicines, so they leave the decision to an expert middleman. Sometimes an advertising campaign, such as Pink Batts or Gib, is run to convince you that your builder is making the best choice on your behalf (usually with the best margin for themselves).
It’s an interesting exercise to imagine how Feltex might have become an innovative organisation to find new markets, higher margins and competitive advantages. I deliberately ignore decorative design and warm, fuzzy advertising.
New manufacturing and distribution processes would possibly offer marginal gains, but they would consume lumps of capital before delivering any return.
“When was the last time a carpet had new technology? Why not a carpet that changes colours? What about luxury merino blends, treated to be both soft and highly durable? How about harnessing the kinetic energy of walking over the carpet? Could we create a lifestyle shift that gets Europeans to live on the floor, Bedouin style?”
When was the last time a carpet had new technology incorporated? Philips has developed fabrics with LEDs impregnated, allowing programmable displays. Why not a carpet that changes colours depending on the mood setting you choose? What about luxury merino blends, treated to be both soft and highly durable? How about harnessing the kinetic energy of walking over the carpet? Could we create a lifestyle shift that gets Europeans to ignore tables and chairs and to live on the floor, Bedouin style? What about developing aromatherapy impregnated dyes?
Putting aside the conspiracy buzz of New Zealand enterprises being swallowed by Australian companies and collusion by Aussie bankers, perhaps the problem is, simply, that it’s carpet made in New Zealand. As ever, we are remote from significant markets. Carpet is heavy. There is a lot of competition and often tariff protection. (Our own market has long been protected. It was scheduled to be zero percent this year but that decision is on hold). Differentiation in the category is a blur.
Maybe survival and prosperity for all Kiwi marketers will depend on the kind of model favoured by the likes of Icebreaker. Grow the raw material, design the aesthetic, develop technology and design the marketing in New Zealand; manufacture in India, China, eastern Europe or wherever is cost effective, the right quality and close enough to markets to be efficient; develop a power brand story and, above all, find some way of placing yourself in the high-value, high-differentiation quadrant. Maybe my ideas for Feltex are obvious or simplistic, but they are just that–ideas. The idea I want to leave you with is that innovation is everything.
Anything else is simply moving the dust mites around.
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