How Companies like Groupon and Kickstarter are Shrinking Design Cycles and Improving Supply Chains

Companies like Groupon, Quirky, and Kickstarter are slowly starting to have an impact on design cycles and supply chain efficiency in very interesting (and unexpected) ways. Take Groupon for example.  It is in over 500 markets in 44 countries. Earlier this year Groupon launched Groupon Goods.  Established companies are now using Groupon Goods in a number of ways.  Obviously they are  using it in a Woot!-like fashion to clear out excess inventory and discontinued stock. But they are also using it to test product attributes in a real market-oriented way.  For example, imagine a company is bringing a new product to market.  They’ve got the product in 15 different colors, but only want to ultimately bring four different colors to market.  The company isn’t sure however which colors will sell the best. Enter Groupon Goods.  The company can make a limited run of the new product in all 15 colors. Using Groupon Goods the company can then offer varying subsets of the color choices across several different markets within the 500+ served by Groupon. This live A/B test can then inform the company as to which colors are likely to sell the best.  The company hasn’t relied on focus groups, consumer surveys, or marketing experts.  They’ve tested the question in the “wild” and are basing strategic direction, at least to a degree, on what the market has told them.

In a similar way, companies – even established ones – are using Kickstart to determine if market appetite for a potentially new – but yet unreleased – product.  If pre-orders are strong, the company can continue with their production plans.  However, if pre-orders fail expectations, the company can scrap their plans and reposition scarce resources onto other projects.  Supply chain timelines have shrunk which is enabling companies to use non-traditional approaches to test market appetite for new products or product feature sets.

We’re also seeing how companies like these are influencing the marketplace in other ways. Apple’s recently revised Lightning guidelines comes shortly after heavy publicity surrounding the Pop Charger Kickstarter campaign.

Moving forward, I expect to see an increasing number of companies rely more heavily on non-traditional go-to-market approaches.  Ultimately, these approaches enable companies to rely more acutely on market information and rely less on their own intuition.