Where to Look for Your Next Million-Dollar Idea

3 Key Charts: The source of business innovation, durable goods spending, and physical e-commerce

Written by PROFIT Staff

Welcome to 3 Key Charts, a weekly department in which we explain the graphs, maps, tables and diagrams that you must understand to guard and grow your business. The diagrams and graphics displayed below could help you discover a new opportunity, alert you to an impending risk, or teach you how to be a better manager.

In this instalment, we look at where fast-growing firms find innovative ideas, durable goods spending by province, and what shoppers use their mobile devices for in-store.

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Cultures of creativity

Where it’s from:The Stars Come Out: Innovation Management in Start-up Businesses” by The Conference Board of Canada.

What it shows: The main sources of innovation at fast- and slow-growing companies that are less than 10 years old. Leaders are the main source of creative, forward-looking ideas for fast-growing firms (those with annual revenue increases greater than 20%), with customer second and employees third. Slow-growing firms (annual revenue increases less than 20%) reported sourcing the largest share of innovation from their supply chain, business partners and vendors.

Why it matters: Constant innovation is the key to continued business success. You can’t rely on one successful product, service or strategy for ever—a competitor will eventually produce a better version or a new idea that cuts into your market share. So finding new million-dollar ideas is crucial. The graph suggests that slow-growing firms rely on external sources to identify new opportunities and to come up with new ideas. More agile companies find most of their inspiration in-house. Company leaders are particularly crucial for rapidly-expanding firms, accounting for almost twice as much innovation as for slower-growing businesses. If generating new ideas is an important part of your competitive advantage or business strategy, you need to be paying person attention to fostering innovation within your company. And since managers and employees ranked just behind leaders as innovation sources, consider implementing a structure or program that encourages your staff to come up with creative ways to grow the business. It’s a better bet than traditional routes like R&D investments and trying to imitate your competition’s developments.

MORE INNOVATION STRATEGY: What Fast-Growing Firms Know About Innovation »

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Canada’s surprising spenders

Where it’s from: “Kijiji Second Hand-Economy Index” by Kijiji.

What it shows: The amount of money spent per capita by residents of the 10 provinces on durable and semi-durable goods in 2013. Residents of Alberta spent the most, followed by those living in Newfoundland and Labrador and Saskatchewan. Prince Edward Islanders came last.

Why it matters: The present slump in oil prices notwithstanding, the Prairie provinces have been the country’s growth leaders in recent years. Internal migrants, immigrants and international investment have all flowed into Alberta and Saskatchewan, and consumer-facing businesses hoping to capture some of this new prosperity have followed their lead. But the graph suggests there may be an underserved market for long-lasting products in Atlantic Canada. Newfoundlanders and Labradorians are almost as consumptive as Prairie residents, so if you’re looking to open a new durable goods outlet somewhere within Canadian borders, The Rock might be a good place to consider.

MORE ATLANTIC CANADIAN NICHES: How to Sell to Affluent Empty-Nesters »

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Buyers and sellers

Where it’s from: “Shoppers bring online competition inside brick-and-mortar stores” by GfK

What it shows: The activities which shoppers use their mobile devices for while inside physical retail outlets. GfK surveyed more than 25,000 users in 23 countries. The infographic excludes results for mobile payments. Price comparisons and contacting other people for advice about a purchase were the top two activities that shoppers engaged in (40% each), with taking pictures of products third at 36%. Buying products via an app or a website were the least common uses (23% and 22% respectively).

Why it matters: Accessing the Internet via a smartphone has become a regular part of the shopping experience. Many savvy shoppers engage in “showrooming” at bricks-and-mortar locations—testing or seeing products in-store, but making their purchases online for a cheaper price. If your business owns physical retail locations, the infographic suggests its crucial to compete on price with e-commerce outlets, to avoid losing out on a sale when a prospective customer checks and finds they can buy the same product cheaper online. But GfK’s findings also point to a less tech-heavy conclusion. While some shoppers did indeed use QR codes, apps and websites to shop in-store, more called another human being for advice. So while money spent on integrating e-commerce with your physical locations will provide a return, a better investment might be hiring sales staff to assist shoppers make purchasing decisions. Everyone likes to be told they look great in that dress, after all.

MORE IN-STORE TECH: 4 Retail Disruptors You Need to Be Ready For »

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What conclusions do you draw from these charts? Let us know using the comments section below.

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