The most important takeaway

Even in a recession, your customers will respond positively to offerings that are truly useful and helpful to them. Investing in innovation that adds value is more important than chasing trends.

Want proof?

Even in difficult times, the cosmetics giant L'Oréal has increased its research and development expenditures annually. This strategy has enabled the company to become a tech-driven beauty pioneer and outperform the global beauty market.

Why right now?

• Multiple studies indicate that companies that operate in survival mode, making deep cuts and reacting defensively, tend to stutter through a recession, recover slowly, and never truly catch up to those that continued to invest and innovate.
• Investing in digital capabilities over the past few years has most likely made your business more resilient.
• Consumers continue to spend, albeit with greater caution and discretion. Thus, whatever you're selling must provide added value as opposed to mere flash.

Focusing intently on customer needs, useful innovation, and achieving quick wins will help you achieve success.

Businesses should invest in technology that satisfies a legitimate customer need.

Understanding the needs of your customers is essential to delivering value.

CarMax, the nation's largest used car retailer and the original disruptor of the used car industry, serves as an illustration. According to Patrick George, editorial director of The Drive, CarMax's current challenge is that a number of competitors are entering the market and attempting to disrupt the industry in their own ways.

To remain competitive, continue disrupting the market, and provide real value to its customers, Carmax inquired about their needs. The answer is that they must visualize themselves and their lives in the car without being in it.

The digital merchandising team endeavored to develop an immersive experience. To illustrate cargo and passenger capacity, they photographed cars from all interior angles (using suitcases, kayaks, drywall, and mannequins, among other objects) with a variety of cargo and passengers. In addition, they added drag-and-drop tabs to help customers comprehend the car's features and how they operate.

Obtain executive support.

Balooch of L'Oréal stated that he is fortunate to have the support of senior leaders for funding the incubator's ideas. How can you acquire such support?

For those less fortunate than Balooch, Gartner outlined in December 2022 four steps for developing a solid business case:

• Understand how your proposal will benefit various company stakeholders; collect evidence, such as internal and external research and proof of concept research
• Describe the strategic importance of your investment; Connect the innovation investment directly to the company's top and bottom line.
• Show the monetary benefit of investing in the innovation; Perform a financial analysis and develop a plan for implementation (how will you go to market?) and a risk mitigation strategy in case the idea fails.
• Present the business case in the most effective manner, including tailoring it to your audience; for example, what does this mean for marketing, sales, finance, etc.?

Think like an entrepreneur

Even in a company as large and expansive as L'Oreal, Balooch emphasized the importance of maintaining a beginner's mind. Don't fall into the trap of assuming an idea won't work simply because you've tried it and failed.

For instance, Rouge Sur Mesure is an app-enabled device that utilizes artificial intelligence to allow users to create their own custom lipstick shades. The system employs three creation modes, including Shade Match, which matches a lipstick shade to any uploaded photo, and Shade Stylist, which uses an algorithm to recommend complementary lipstick colors based on your outfit.

Balooch stated that the company attempted to bring the product to market a few years ago, but augmented reality and market trends did not support it. Instead of abandoning the project, L'Oréal waited for the next generation of technology and for macroeconomic trends to indicate demand. Reviewers have described it as "an entirely new chapter in personalized beauty" and "clever and practical".