As Procter & Gamble (P&G) recently committed $12m (£6.8m) to further expand its innovation centre in Singapore, with plans to launch as many as new 10 brands into the market in the coming years. Director James Kaw tells The Drum how it’s proving the value of marketing and R&D teams coming together.
The investment into its innovation centre in Asia is the largest commitment to the programme outside the US, where P&G’s innovation hub is working on ten times the number of experiments.
“We're end-to-end, we talk to consumers, we work on new ingredients and materials and deliver initiatives for our brands into the marketplace,” Kaw explained, saying the Singapore centre is specifically focused on the beauty, hair, skin and personal care sectors.
Olay’s much publicised ‘Skin Advisor’ app that allowed people to take selfies in exchange for detailed skin analysis and advice on what products would suit them came from Kaw’s team, for example.
And then there’s experiments in areas like robotics where it developed an ‘arm’ that can be used to brush hair for hours on end in order to test products. Such creations aren’t designed for consumers, but for operational efficiencies.
In addition to innovating for P&G’s existing brands, Kaw’s team of just 500 people – ranging from scientists and engineers to data analysts – has been tasked with developing the next billion-dollar company that will tap into the rapidly growing Asian market, where by 2030 analysts predict almost 60% of the world’s spending on consumer goods will take place.
Through its GrowthWorks incubator it’s partnering with a number of start-ups to develop as many as 10 new skin, hair or beauty brands. It’s still on the hunt for these start-ups, casting a wide net to find the most promising. Kaw revealed he will spend a few hours a week pouring over the many pitches he receives on LinkedIn from young entrepreneurs.
“It's like prospecting for gold. You need to take the good with the bad,” he joked.
Kaw does, however, have a couple of areas he’s keen that products can address. Firstly, ‘personalisation’, especially in the beauty and skincare sectors where people rarely have the same needs - he wants products that can be customised and adapted to a customers specifications. Secondly, ‘Boomer consumers' – i.e. those over 50 years old – which he believes could be served better.
And then there’s the shift to FMCG companies trying to establish direct-to-consumer (D2C) relationships. Much of the development here has been in simply acquiring businesses that have navigated this terrain successfully, the most famous being Unilever’s billion dollar buyout of Dollar Shave Club.
P&G had also experimented, including a trial of a Tide Pods subscription service for its long-running laundry brand. But Kaw is interested in developing a D2C company from scratch.
“We're looking to learn about that. One of the challenges with D2C is that not all of them make money. It's very expensive to serve. The venture capitalists are subsidising it. But as things evolve that could be a very important element of how we get to consumers. We are looking to learn,” he said.
Any brands that emerge would be launched locally with the intention to take them globally. “We've partnered with the government with a goal to create $2-3bn brands. That's the ambition, to create big brands that appeal broadly but we recognise that the marketplace is evolving and there might be brands that are regional and still substantial.”
This process is also a new model for how its product and marketing teams work better together. While data scientists and designers may be at the forefront of the new brands emerging from the Singapore centre, Kaw stressed that marketing people always have a seat at the table.
“There’s always multifunctional representation. We recognise, particularly in beauty that we need a 'four in the box' type structure, and that we're all thinking about the commercialisation even as we're designing the product,” he said.
“In a world where things are moving faster, throwing things across the fence is not an option. We are really working in that structure so we continue to move together and that everyone’s input is there. Does it happen all the time? It doesn't, but it's always the aspiration to make sure we're all moving in the right direction.”
To ensure everyone is on the same path Kaw has established a 'connect and develop' internal initiatives and ‘community of practice’ events where people from a variety of P&G regions routinely come together to share insights and learnings.
In the US, chief marketing officer Marc Pritchard has also spoken of how it's approaching this, saying it's also a way to cut the amount of work that’s being outsourced to “suppliers or agencies” and forging a more direct relationship with consumers.
P&G is set to report its third-quarter earnings this Tuesday (22 April).