The Right – And Wrong Stuff – When it Comes Product Innovation with Carter Casthttps://specright.com/wp-content/uploads/2022/03/MicrosoftTeams-image-34-1024x1022.png 1024 1022 Specright Specright https://specright.com/wp-content/uploads/2022/03/MicrosoftTeams-image-34-1024x1022.png
In this episode of the Beyond the Shelf: Product & Packaging Podcast, Laura Foti spoke with Carter Cast, Professor of Entrepreneurship at the Kellogg School of Management, best-selling author, and former CPG executive, about the role of marketing in product innovation, lessons from product wins – and failures – and what it was like to pioneer eCommerce at Walmart.
When it comes to product innovation, there’s always one product that “could have been” but just didn’t work out. And we tend to learn more from our failures than our successes.
For Carter Cast, that idea was a black bean dip, an innovation he pioneered while working at PepsiCo. While the product was amazing, the sales rollout actually led to it being shelved, which taught Cast an important lesson about building a solid relationship between marketing and sales.
I’ve known Carter for a few years now and have learned so much from him about what it means to be an innovator and leader. And while he’s accomplished a great deal in his career, his openness about sharing what didn’t go well has taught me so much.
Carter spent his career as a marketing executive at PepsiCo and was later the founding Chief Marketer of Blue Nile, the company that pioneered selling engagement rings online, and the author of the best-selling book “The Right (and Wrong) Stuff: How Brilliant Careers are Made – and Unmade.”
He was at the forefront of some amazing product innovations, ranging from the Tostitos Scoops to launching Walmart’s eCommerce business.
Below are some highlights from our conversation – you can listen to the full audio on Apple Podcasts, Spotify and Google Podcasts. And be sure to subscribe to our channel to get the latest episodes as soon as they drop.
You can catch the full episode here – and be sure to leave a rating or review if you liked the show – it helps others find the podcast.
On launching more expensive Tostitos packaging to drive sales
“So we went into a test market, we created a test market and we did an AB test. On one side, we had a lid that didn’t have all the colors, and we also had a lid that was smaller. And we showed that by co-merchandising these together with this larger jar lid, we actually promoted the bundled purchasing of the products together, and the transaction average was large enough to more than pay off the cost.”
On going beyond diamonds at Blue Nile“One thing that we did is we established ourselves as being a place where men can buy engagement rings, but we made sure we always were good at speaking to women because we knew that we would get self-purchase women back…You want to start with your aspirational product because that gave us the halo to do jewelry.
If we would’ve started with sterling silver and then tried to sell diamonds, I don’t know if that would’ve worked in reverse, but starting with the signature item, a diamond, gave us sort of this halo effect to then do pearls and do gold and do sterling. So we went right for the sort of sweet spot, the diamond engagement ring, and then extended from there.”
On the relationship between failure and product innovation
“If you aren’t failing, you’re probably not trying enough. Your goal is quality at bats. I think your goal is to make sure that you have a good hypothesis that you’re working under around innovation, what’s your hypothesis. Are you testing it effectively? And if you launch these in test markets and they fail, but you have a good sound hypothesis and you executed the test well, well, good for you. Keep swinging at the plate. So I never felt bad about the failures if we tested intelligently.”
On how leaders can create an environment that fosters innovation
“One of them is innovative companies start by uniting people around a shared purpose…you have to have the why before the what. So there is a shared purpose and you’re on a mission together.
Whatever the mission is, to feed the poor, to lower the carbon footprint through automotive transportation, to help people eat better, to help people enjoy their food more, whatever it is, there is a shared purpose and mission that aligns people so that they feel like they’re on a vision quest.”
On building the eCommerce business at Walmart
“The thing that made that job hard was the classic innovator’s dilemma. You build a business model that is working really well, and the return on invested capital for super centers was very high. And so to innovate in this manner, you are going to, for a period of time, break that model and potentially cannibalize the holy grail, and try to get people’s heads wrapped around the fact that we were not… How do you view yourself? Are you a physical store retailer, or are you a distribution company?”
Listen to the whole episode here – and be sure to stay tuned through the end for one of my favorite “Keep, Kill, Change” segments, where we make Carter decide between frozen yogurt, orange starburst, and mason jars.
Beyond the Shelf: The Product & Packaging Podcast
In this podcast, we’ll interview experts and industry leaders across food, beauty, CPG, and industrials.
We’re going to go beyond the shelf and get a behind-the-scenes look into the things you use every day – and even the ones you don’t.