Renovation and Innovation- key to growth in business

 Renovation and Innovation- key to growth in business

There are moments when we visit various businesses—be it a clothing store, a restaurant, or an online shop—and notice that the same decor or website landing page has remained unchanged for an extended period. This stagnation can lead to the impression that the business is merely scraping by rather than thriving or evolving. While the company might have a solid financial foundation, customer perceptions can play a pivotal role in its long-term viability and success. Based on my consulting experience, I've identified several distinct types of businesses in this context:

Type 1 - Lack of Renovation and Lack of Innovation:

This category includes businesses that depend heavily on their established legacy. They often boast a strong lineup of well-regarded products and a loyal customer base that appreciates their quality. These businesses have become accustomed to their ways and have not sought out new trends or improvements. As a result, they may struggle to engage or attract a younger audience or new customers, as they can feel outdated. Examples can often be found in local markets where you see familiar establishments, like long-standing family-run diners or speciality shops that have not updated their offerings or environments in years.

Type 2 - Consistent Renovation and Lack of Innovation:

Businesses in this group allocate funds for renovations every couple of years, refreshing their physical environments to give the illusion of progress. They may paint walls, replace old furniture, or redesign their layout to create a vibrant and contemporary atmosphere. However, despite these cosmetic changes, the core offerings—such as the products or menu items—remain essentially the same. This strategy may help retain existing customers who appreciate the fresh aesthetic, but it can lead to disappointment when patrons realise the experience or product quality hasn’t changed. A classic example of this could be a coffee shop that gets a new paint job and some trendy seating but continues to serve its same, unchanging menu.

Type 3 - Lack of Renovation and High on Innovation:

Some businesses opt to invest heavily in product and service innovation while neglecting the physical aspects of their establishment. For instance, an online retailer might enhance its website through cutting-edge UI and UX design, making the shopping experience smoother and more engaging. However, in a physical store setting, if the infrastructure remains outdated—think creaky floors, poorly lit aisles, and peeling paint—customers may fail to appreciate these advancements. A tangible scenario could involve a restaurant updating its menu with fusion dishes featuring international flavours while continuing to operate in an old, uninviting space. While this might retain loyal patrons who enjoy the new menu items, it may not entice new customers who the outdated ambience might put off.

 

Type 4 - High on Renovation and High on Innovation:

In this category, businesses strategically allocate their budget to focus on both renovation and innovation simultaneously. This financial commitment results in a proactive approach to enhancing the customer experience. These businesses work on improving their physical space, such as modernising the storefront and improving customer flow, while simultaneously introducing new products or services. For example, a retail store could revamp its checkout area to allow for faster transactions, enhance product displays for better visibility, and introduce a loyalty program that rewards repeat shoppers. This dual focus communicates to customers that the business is committed to value, fostering a sense of loyalty among both existing and new clientele.

As a business owner, I encourage you to assess where you stand within these categories and identify specific areas requiring renovation and opportunities for innovation.

From a financial perspective, it is crucial to set aside a designated budget annually for both renovation and innovation. This intentional plan will help you utilise reserve funds effectively and prepare for future enhancements.

Once you've reflected on this, reach out to your loyal customers, staff, and other stakeholders to solicit their insights about what could be refreshed and what exciting new products or services might be introduced. Engaging these discussions can fill your idea reservoir with valuable suggestions, and as you implement these ideas, you’ll likely see a notable impact on your profits.

To illustrate the principles of renovation and innovation clearly, consider the example of a retail clothing store. By enhancing the customer experience with additional fitting rooms and incorporating a small, supervised play area for kids, the store provides a practical solution for parents who often face challenges while shopping. This thoughtful renovation not only reduces customer frustration but also enhances their overall shopping experience.

Furthermore, suppose the store effectively bundles products, such as pairing a stylish T-shirt with matching jeans, loafers, a belt, and grooming products into an attractive package. In that case, it creates a compelling offer that is likely to entice younger shoppers looking for convenience and value.

Additionally, in the realm of ice cream parlours, allowing customers to curate their dessert by selecting from a variety of flavours and unique toppings creates a more interactive and engaging experience compared to simply offering a limited selection of pre-determined flavours.

Finally, transforming traditional boardrooms into dynamic idea-sharing spaces can foster a culture of collaboration and creativity, ultimately ensuring that the processes of renovation and innovation work hand in hand to keep the business flourishing.

M.L. Narendra Kumar