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Two things recently intrigued me–though different areas of thought, they are both examples of innovation driven by a shopper need vs. what an operations guy says can be produced within existing plant specs.

Shopping with kids is HORRID, and most parents would rather hang bait on themselves and swim in a shark-infested ocean than do so. Trader Joe’s has a great program for keeping kids engaged. Shoppers’ children are challenged to find a stuffed animal mascot on the shelves (a dinosaur named Sue) and at checkout, if they can say where Sue is hanging out, they receive stickers or a lollipop.

Sue is hidden well enough to keep children interested in the visit and even more amenable to going in the first place. Trader Joe’s understands the need for a solution to the shopping problem of how to make a trip successful with children in tow.

The other example of true innovation comes from the Third World. I just finished reading Robert Neuwirth’s book, Stealth of Nations. He writes about all those small, illegal “black market” street vendors and how they account for trillions of dollars in retail sales and are the fastest growing global channel.

Essentially, the requirement in these markets is to meet the immediate needs of people who dwell and shop on the streets with products such as on-the-go-food, pay-as-you-go-cell phones, and purified, transportable water.

What sells is what is in demand and helps people live improved lives. This channel of distribution is bigger than Wal-Mart and growing hyper-fast. The biggest flow of goods comes from China, but P&G, Unilever and Colgate-Palmolive are all getting in the game, hiring local distributors and innovating current products to meet the demand in the “shadow markets” of developing nations.

For example, P&G created a Downy laundry softener product that requires only one rinse, as many shoppers in this channel have a water-scarcity issue. From a sustainability perspective, a segment’s limited access to resources leads to innovation.

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