Editor’s Note: As ever-vigilant trend spotters, we’ve noticed a few ideas worth keeping our eye on in the new year. Here’s one of the trends to watch in 2013…
There’s a new definition of consumer demand emerging through online funding programs like Kickstarter, where the consumer is actually choosing to support and invest in the ideas or innovations that they want to see developed.
In the last couple years, we’ve seen retail stores and restaurants developed either solely or partially funded by the consumer through crowdfunding. One of the things influencing this trend is the increasing desire to support independent or local retail. For entrepreneurs, this method enables them to take their idea straight to the consumer and ask them to help fund it—no bank loan required.
Philadelphia-based, casual apparel brand Duke & Winston utilized the Kickstarter platform to help gain funding to increase its national presence. Those who “kick in” are awarded merchandise based on their investment level, ranging from a $25 t-shirt up to a shopping spree.
Babushka’s Kitchen, a Polish restaurant in Columbus, Ohio, used Kickstarter to fund the re-opening of their restaurant in a new location more appropriately sized to their business. In return for money to fund the move, backers received a meal in the new restaurant or, for a more sizeable donation, a menu item named after them.
Kickstarter’s “all-or-nothing” funding method means that individuals set project funding goals and deadlines; if they’re met, the project is funded, but if not, no money exchanges hands. This method requires developing a compelling product and a strong brand story to generate interest early and quickly.
For big brands, supporting the growth of the little guys could mean expanding their reach to a new consumer group or enable them to offer an innovation they can’t provide on their own. For example, Best Buy launched the College Innovator Fund earlier this year. Looking for the “next big technology innovation,” Best Buy offered individuals a chance to submit their ideas with a chance to receive $50,000 and a mentorship opportunity with Best Buy’s Exclusive Brands team. Recently Nike also announced plans for a Nike+Accelerator program powered by TechStars. The mentor-driven program will guide 10 companies to help create products using the Nike+ technology.