As we near the end of the 2000s, it’s time to take a look back at some true product innovations of the past decade and how they have changed our lives. Over the next couple of weeks, I’ll be blogging about some of the products that have really been game changers in the market place. While major corporations have released some great innovations such as the iPhone, Guitar Hero, and the Prius, I’m going to focus on more products that have been created by entrepreneurs and didn’t have a team of engineers building the products.

Product Innovation # 1: Inflatable holiday decorations

For decades, the outdoor holiday decoration business was pretty static: lights on houses and reindeer and Santa statues at Christmas, carved pumpkins at Halloween, etc. Then in 2000, Texas-based novelty gift company Gemmy (the same folks that brought us Big Mouth Billy Bass in 1999) introduced residential inflatables, and suburban neighborhoods haven’t been the same since. Today, Gemmy offers over 1000 different versions of inflatable decorations for all seasons of the year and knock-offs abound. Whether you like them or not, you have to admit they were a game changer. Two key lessons on why Gemmy inflatables were successful:

Distribution channels options – One of the challenges when you truly have an innovative product is finding shelf space in retail outlets (this was a challenge for Pom when if first came out). Gemmy sells their inflatables through major retailers such as Home Depot and Target and WalMart as well as small outlets and a variety of online retailers. While there’s no specific space for inflatables in these outlets, because most major retailers create special holiday sections for season and there immediately was a good home for the inflatables to stand out when they were first introduced. This is a critical lesson to keep in mind as you develop your product idea: without a logical place for shoppers to find your product, a retailer is never going to carry it.

Repeat Buyers – We all know it’s easier to keep an existing customer than to find a new one. If you look at some neighborhoods, you’ll find that Gemmy buyers are very loyal. Living in San Francisco I hadn’t seen many of these until visiting my in-laws in Orange County for the first time and I discovered the abundance of these air-blown beauties. From the look of it, home owners get hooked on their first $20 Santa, and then next thing you know, they’ve not only been upsold on all the reindeer and the on the $300 snow globe, but soon are cross-sold on inflatables for Valentines, Easter, Independence Day, Thanksgiving, etc. This is another key aspect in determining if your product idea has legs: is it a one-hit wonder, or is there potential for a successful line of products that will appeal to the same customer base.

Distribution channel options and product breadth and depth are key elements for any business to be successful. Otherwise, all you have is a product, which is difficult to sell. If you’re selling into retail markets, the main question you’ll hear from your distributors, retailers, sales reps each time you speak with them is always “what’s new?” If you can’t think of dozens of add-on products you think you can create, then what you’re building is a product and not a business and you need to be very strategic about how you’re going to take this to market. Take the OTG New Product Diagnostic to see if your product idea can be the next game changer or wind up in your basement.

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