Business Guide to Innovation

Case study: Potent Potions

Retailer Perfect Potion was using the word ‘natural’ in its truest sense long before green marketing became popular. The business took well-being to a new level when, in 1991, founders Sal Battaglia and Carolyn Stubbin opened a store that sold natural therapeutic products because they couldn’t find anyone doing it well. The difference between their store and others was apparent immediately.

“Our vision is that we make Perfect Potion the most sought-after experience in the world,” says Battaglia. “Our customers know what it is as soon as they walk into the shop from the mood– design of the shop, the music playing, and the aromas that create this experience.”

Added to the enticing multi-sensory environment is the education process provided by therapists and sales assistants creating repeat business. “People were coming into our shop saying 'how am I supposed to use the essential oils?' So we ran workshops and discovery nights for our customers,” Battaglia explains. “By doing that we created customers who were very passionate and loyal to Perfect Potion. That was innovative in retail because no one had offered in-store workshops after hours for their customers.”

The business placed as a finalist under the Innovation in Retail category at the 2005 National Retail Association Awards, but Battaglia says innovation had long been embedded in the business. “Innovation is about constantly changing, not just changing at the whim of consumer trends but actually setting the trends,” he says.

True innovation also involves a bit of risk. Their decision to discontinue some products and introduce certified organic ingredients at a 25 percent price increase was a little risky but because it stayed true to their core values and because no one else had done it, the risk paid off. Now Perfect Potion complies with a European standard, stricter than any criteria in Australia, to keep ahead of the certification game.

Education has also become a more important part of their business with their workshops expanding to corporations looking to use aromatherapy for the well-being of their teams. With programs like this, you could say Perfect Potion has the right recipe for innovation.

Case study: Urban Intuition

A showroom full of office furniture may not strike you as particularly innovative, but what if it could fit out any sized office space you have in mind? This is the premise behind Urban Office, a business that began in 1986 as the Office Furniture Centre. Now the business is less of a retail outlet and more of a service provider.

Alan Monahan, director of Urban Office, says the business has evolved since the early days. “We started with a commercial furniture showroom open to the public. With the first recession [in the late 1980s], we realised government contracts were still there. They were still buying and the greater public weren’t, so we secured a manufacturer for government contract work and we built the business further with government.”

In the 1990s, the store started securing exclusive products for more discerning customers. This allowed them to expand their customer base and sell upmarket, which meant their catalogues began to appear in architects’ offices. Then, in response to consumer demand, Urban Office created a service that enhanced the furniture sales.

“People started asking us for more than furniture so we started doing space plans and designs,” says Monahan. “But these were people who wouldn’t ordinarily engage in architectural services.”

The added service involved conducting focus groups with clients and then recommending furniture and fit-outs in line with their needs. The service aspect of the business grew until Urban Office needed to subcontract builders, which then became an in-house operation.

“Bringing in a licensed builder gave us more control. We’ve since brought in a second licensed builder to build our skills, and we employ a number of subcontractors on the sites where we’re operating,” says Monahan. “The furniture is now actually secondary.”

Urban Office’s unique selling proposition is that they have retained the full showroom from their time as a furniture store, “so people can touch and feel and sit on what they’ll have in their office”, notes Monahan. This means they go beyond other design and construct companies that may only work from an office. Another innovation is the way they’ve acquired new clients—by approaching leasing agents. “We went knocking on their doors because they’re at the coalface as far as new business is concerned. We all know there are a lot of people out there who need our service but how do we get to them? They’re in touch with the leasing agents when looking for a new space or an extension or refurbishment. So it’s an opportunity to get our name out there at the time they need us.

“These poor clients have been taken around by an agent to look at 500 square metres of space and they look at bare floor and they think ‘where the hell do I start?’ We do the space planning and the 3-D modelling so that people can actually view a fit-out. If they want a walkthrough, we can do that. To bring clarity to the situation is one of the things we do best and that’s what the customer is buying.”

Monahan says the evolution of Urban Office has come about because innovation is a mindset ingrained in the business. “Innovation is about anticipating future needs and then catering to them. We have a long-term view of the market and we’re always future-pacing to see what we can do in our business to stay ahead of the crowd. It’s being a leader in the market rather than a follower.”