With Tide Pods, P&G Aims to Create an 'Irresistible Experience' for Consumers and Shareholders
For Phil Duncan, global design officer for Procter & Gamble Co. (IW 500/11), innovation in its simplest form is "putting together what is known with something that is unknown."
"It's about connecting context -- the 'what is it?' -- with 'wow, I didn't know it would do that,' and wrapping it in all in an irresistible experience," Duncan explained earlier this year at the Front End of Innovation Conference in Orlando, Fla.
Duncan, a 20-year veteran of Cincinnati-based P&G, has seen that conception come to life with the recent launch of Tide Pods.
"We all knew that the liquid aspect of our laundry experience -- while really good -- had a few opportunities [for improvement], as we like to say," Duncan noted. "If you've ever used a liquid Tide container, by the end of the bottle you usually have some smudge running down the side. That was a less-than-ideal consumer experience."
P&G sought to change that with Tide Pods. Introduced in February, Tide Pods are tiny pre-measured packages of liquid laundry detergent -- sold in a bag or plastic fishbowl-shaped container -- that can be dropped in the wash.
Duncan said it was clear from early customer trials that "this unique dosage device" dramatically changes the way consumers interact with laundry detergent -- for the better.
"They were touching it, holding it, delighting in it," Duncan said. "Whereas before it was kind of a removed element that you poured out of a bottle or out of a scoop."
Small Pods, Big Project
The development of Tide Pods was no small undertaking, even for the world's biggest consumer-products manufacturer. The pods hatched, so to speak, after eight years of R&D and more than 450 packaging and product sketches, according to P&G.
The company also turned to consumers -- some 6,000 of them -- for ideas.
"We continuously hear that laundry is a mundane, time-consuming and complicated task," said Alexandra Keith, vice president of P&G Fabric Care North America, when the company unveiled Tide Pods. "We believe that sentiment is a symptom of the lack of meaningful innovation made to fabric care in years. We're excited to introduce a product that will put a spark back in the laundry process."
Key features of the pods, according to P&G, include the three-chamber design, which helps separate ingredients such as hard-water modifiers, stain fighters, perfume and whitener "so that they remain stable and potent and mix only in the wash water."
The company also touts the fact that the pods are designed to perform in all water temperatures, noting that 40% of Americans wash their laundry in cold water.
Still, the pods themselves weren't the only aspect of the product launch intended to put a new spin on the category.
The decision to offer Tide Pods in the aforementioned fishbowl-shaped container underscores "the importance of having a vision of how [the product] fits into the environment in which the consumer will select your innovation or not," Duncan said.
"We thought about how this was going to be disruptive on the shelf," he added.
Interestingly, P&G projected that consumers would favor Tide Pods in bags over "what we call the aquarium design," by a ratio of 2:1, according to Duncan.
"It's been the exact opposite," Duncan said. "People have really loved this reframe of the category."
Can Innovation Turn the Tide?
Tide Pods come out of what CEO Robert McDonald calls "an increasingly promising pipeline of category- and brand-creating innovations," which P&G hopes will turn the tide of lackluster growth in recent years.
P&G, which reported a 7% drop in diluted net earnings per share for its fiscal 2012, is forecasting that sales will be flat or down slightly in fiscal 2013. CEO Robert McDonald acknowledges in the company's 2012 annual report that P&G in recent years has not "delivered sufficient growth to rank among the best performers in our industry."
To get the company "back on track to leadership levels of growth and shareholder value," McDonald notes, P&G is renewing its focus on innovation -- particularly the type that "obsoletes current products and creates new categories and new brands."
McDonald cites Tide Pods, Swiffer cleaning products and Crest Whitestrips as examples.
"Some of our fastest periods of growth -- and some of our largest and most profitable present-day businesses -- were driven by discontinuous innovation: disposable diapers, liquid laundry detergents, home-care items like Swiffer and Febreze," McDonald says. "We need to get back to this level of innovation in a meaningful way."
