User Innovation vs. Manufacturer Innovation: Why Big Box Retailers are Innovating Energy Use

A growing trend among big box retailers is to turn their barren rooftops into productive energy factories. The interesting dynamics in this are that big companies are very able to create new ways of doing business if it is in their interest. By that I mean that if they are the user—not the manufacturer—of the product. Manufacturer innovation is when someone improves something with the intent to profit from selling it. On the other hand, user innovators plan to benefit from using whatever it is they are creating. Users do things like mixing chocolate with milk to create a tasty drink. Manufacturers put a fifth blade on razors with already too many blades. We usually think of users as individuals.

In the case of energy production, power companies are the manufacturers. Their motivation is to make more money selling the same thing. So if they innovate, it will come in the form of incremental advances that could possibly help companies or people to understand their usage or have better access to information—nothing revolutionary. Companies receiving power are the users. Their motivation for innovation comes in the form of creating whole new ways to change the power grid. Big box retailers like Target and Walmart want more control, less cost and greater dependability when it comes to getting their power. Therefore, they are motivated to circumvent the power stations all together.

Ikea is trying to produce 100% of its power. In a meeting with a Chinese power company, they realized that they already were a larger producer of electricity than that company. Walmart, Cosco, Kohl’s and Apple are the leading energy producing retailers at the time. I’d look to see more and more of them going off-grid for future power.

Ikea

The Companies That Are Using The Most Solar Power

Again, the difference between user innovation and manufacturer innovation is that users intend to benefit from using it. The original Gatorade was a user innovation. The mountain bike was a series of user innovations. New Coke which debuted in 1985 was a manufacturer innovation.

New Coke

The Real Story of New Coke

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