What is the Correlation between Recession and Innovation
As ever so often after a crisis or economic turmoil, organizations re-position themselves to ensure they’re prepared for the post recession recovery. Research and development teams of large corporations hustle to bring new products to market so does the high end luxury hotel market, going through some major facelift jobs at properties to rejuvenate their products to reconquer the market with their new value propositions. (follow this link to see what Forbes magazine had to say on this topic)
Two things usually happen:
The first being that such new product launches, in turn, create a new frenzy in the local (e.g. Hotels) or global (e.g. Airlines) marketplace making it indispensable for competitors to quickly adapt across industries and catch up in order to avoid loosing market share in this ever competitive market environment (the good old “You Snooze You Loose!” law).
The second, is that with these market push’s we often get to see some some new products and services. Organizations have long understood the need to constantly evolve. In another post I speak about the fact that “All Failure is failure to adapt, and all success is successful adaption”, and nowadays constantly challenging the status quo and developing new niche products are essential and a basic requirement if organizations are to succeed.
Taken to its logic conclusion, both happenings then have a positive impact for the consumer as we see new product and service innovation taking place. We also progressively see how organizations continue to strive to adapt to the consumers needs and wants.
More good news: In this day and age, where consumers have a much greater say (with immediate repercussion if left unattended) and want to be involved in the decision making process, the demands and expectations on organizations feel greater pressures to meet such demands. Web 2.0 consumer interface platforms, social media channels, the crowd movement and simply the way news travels and spreads (at the speed of light) have led to a paradigm shift: Organizations today have seriously begun taking the public opinion into consideration in their decision taking process when it comes to environmental impact and sustainability.
And hence new products emerge for business travelers that provide exciting new features. Their objective: To provide new experiences, to push the limits and to create emotions and lasting impressions.
Etihad Airways – The Residence – A bold move
Etihad Airways, as the first airline, kicked off and raised the bar with a product they call “The Residence”, featuring a 3 room apartment style environment where passengers can relax and unwind in a living room that transforms into a dining room, a bedroom with a full sized bed that sleeps two and a bathroom with a private shower. The three-room suite occupying approximately 12 m2 comes with a private chef and private butler, handling all your heart desires with the sole objective of putting your mind at ease for you to enjoy the experience.
What Etihad really seem to have understood is that they asked themselves not only what the customer needed and wanted, but also how the customer would experience travel on their new A380 upper deck product.
Yet a word of caution at this point: Designing a product is easy – you surround yourself with the best in product sourcing, architecture and design, but service excellence and perfection can not be bought in. And so it remains to be proven if the private chef and the private butler on these flights are up to the challenge to make the difference with their human touch when interacting with the customer. Ensuring that relationships and trust are established in a short period of time, that all customer feedback, needs and wants and the smallest details are logged and kept in memory. As these are the small things that make the difference, allowing to anticipate the passengers preferences when it comes to additional key service features provided, such as the bedroom turn down service, the preferred hot beverage with the breakfast served in bed, the recalled preference for TV channels, the shoes shining miraculously in the morning together with the perfectly ironed shirt, just to name but a few.
And so yes, Etihad Airways is pushing the product and service further and is asking for a significant price premium. It will remain to be proven if consistent levels of service – those soft skills – will be able exceed the customers expectations over the medium to long term. Kudos to Etihad and all thumbs up from my side in daring to take such a bold step. I do wish Etihad to succeed with this new business model as it can and will only encourage their competitors to re-consider their offerings and trigger them to reach even further…and for us as passengers, we have some grand travel times ahead of us.
Other Reads on Innovation during Recession times:
Other Articles written about The Residence on Etihad Airways: