Richard Davies assumed the position of Chief Development Officer at the beginning of 2016 after serving as Newell Rubbermaid’s Chief Marketing and Insights Officer since 2013. In this capacity, he led the revitalization of the company’s innovation funnel, rebuilt brand management functions, enhanced the quality of our advertising and furthered the strategic deployment of our brands internationally.
brands /
Making
Our Brands
Really Matter
Q&A With Richard Davies,
Chief Development Officer
What do you find most compelling about Newell’s opportunity in the consumer products sector?
We compete in large, growing and unconsolidated categories, in which the top three brands represent less than 50 percent of the total market. That creates room for growth compared with fast-moving consumer goods (FMCG) categories where the top players command closer to a 75 percent share of the market. We also enjoy a low cost of growth. Newell has achieved a 60 percent share of voice in the U.S. with only 3 percent of revenue spent on advertising. The leading players in the FMCG sector have to spend about 10 percent of sales on advertising to get only a 28 percent share of voice.
As Chief Development Officer, what are your key focus areas?
The first of five pillars in the “How to Win” section of the Growth Game Plan is “Make Our Brands Really Matter.” This is the pillar owned by the Development team. We are focused on developing in-depth, locally relevant consumer insights, building an innovation engine, creating outstanding brand communications and winning with design and product performance.
How has the Development organization evolved over the past three years?
We’ve been on a journey to accelerate the innovation rate. We are targeting 30 percent, and in 2016 we expect to reach that level.
By investing significantly more dollars in consumer research — triple what we spent historically — we now have the deepest understanding we’ve ever had of our categories and how consumers see our brands and our competitors. Through this process, we have identified $3 billion worth of unmet needs and built a stronger innovation funnel designed to meet those needs.
PRODUCT
INNOVATIONS
How do you come up with ideas for the innovation funnel?
Filling the innovation funnel is a team effort. Marketing, consumer insights, research and development and design all work together as partners in this area. The money we spend on market research is a great source of insight, which leads to new product ideas. We’ve invested $60 million over the last few years to strengthen our insights capability, increasing the ratio of marketing insight people to marketers from one insight person to 20 marketers to one insight person for every eight marketers. Also, we’ve developed our own in-house approach to ideation, while also looking to countries outside the U.S. for inspiration. To date, we’ve generated more than 10,000 idea fragments that we’ve synthesized around 500 bigger ideas and chartered approximately $150 million of innovation projects. As a result, our innovation funnel has more than doubled since 2013.
What are the advantages of having this innovation funnel?
In addition to the significantly increased value, the innovation funnel is now looking further ahead, which allows us three plus years of visibility into our future growth. We can share these long-term innovation “runways” with our top strategic customers. We have confidence in the strength of the funnel because we have tested more than 1,200 ideas with consumers using industry-accepted measurements, and these have scored in line with or better than best-in-class benchmarks. Another attribute of the funnel today is that it’s increasingly international in scope.
ADVERTISING
Graco® 4Ever™ 4-in-1 Car Seat
Sharpie® Extreme Fade Resistant Marker
Calphalon® SharpIN™ Self-Sharpening Cutlery
Rubbermaid® Freshworks™ Produce Saver
Goody® Clean Radiance® Brush
Irwin® Tools Brazil
Mr. Sketch® Scented Crayons
Paper Mate® InkJoy® 2 in 1 Stylus Pen
Sharpie® Marker Mexico
How have your marketing spend and activities changed under your leadership?
We have significantly increased our investment in advertising and promotion, from 2.7 percent of sales several years ago to almost 5 percent of sales in 2015. And we expect to drive that level even higher to about 7 percent. But we aren’t just spending more, we’re also spending smarter. Our non-working advertising ratio, which is the money spent on the production of material relative to the amount of money in our advertising budget that’s spent on communicating, has improved from 35 percent to 15 percent. Our media mix has also moved toward shorter-length commercials, increasing the impact of our communications spend. Last, we’ve broadened our advertising vehicles. So today, we’re not just a TV and print company — we are a TV, print and digital company. We’re spending more than 20 percent of our working media dollars on digital and expect that number to increase steadily as we continue to expand our digital presence.
What can we expect from the Development organization in 2016?
In the coming year, we expect further momentum for many of our brands as we see some of our strongest innovation ideas hit the marketplace. We are particularly excited about the launch of the Paper Mate® InkJoy® Gel Pen, with ink that dries three times faster* for reduced smearing, and Rubbermaid Freshworks™ Produce Saver, which features a preservation system that keeps produce fresh for up to 80 percent longer.** We’ll also be supporting our brands more than ever by further increasing our investments in advertising to a level that is three times what we spent in 2013.
*vs. the leading competitor based on average dry times of black, blue, red and green. Individual dry times may vary by color.
**Based on strawberries in FreshWorksTM containers vs. store packaging at day 21. Results may vary depending on produce and use.