Open innovation, also called crowdsourcing, has been adopted by several companies seeking to improve their innovation process by leveraging the ideas of people outside of the organization. The biggest beauty company in Brazil – Natura – is a huge promoter of open innovation, brought to life through different initiatives that contribute to Natura’s performance.
Natura is the leader in the cosmetics and fragrances industry in Brazil. According to HBR, in 2011:
“Natura— which launched 435 new products from 2009 to 2011—has a leading market share of 23.2%, a 62% household penetration rate, and nearly 100% brand recognition. From 2002 to 2011 the firm’s revenues grew by 463% and its net income by 3,722%, and the company had an average gross margin of 68%, compared with the industry average of 40%.”
However, Natura’s innovation team is aware that they don’t have all the answers, and even don’t have all the questions, and therefore the company needs crowdsourcing to foster its innovation process, critical to sustain the leadership position in the market. Natura deployed open innovation through two main initiatives: “Cocriando Natura”, for the broader public, and “Natura Campus” , targeted at college students.
“Cocriando Natura” is a platform where consumers can engage in “journeys” to address a problem or question. The platform allows users to collaborate online and through face-to-face meetings, and leverages gamification and recognitions to encourage users’ contributions. The ideas are used as inspiration sources by the internal teams.
“Natura Campus” is a platform that targets college students, bringing the company closer to the best universities in the country. The initiative allows students to submit their ideas and follow up on related projects. Besides, it promotes Hackaton events, which are intensive efforts that start with ideas and move into actual prototyping. The Hackaton events may bring together students, employees, customers and also renowned partners, such as MIT Media Lab and IDEO.
Innovation is part of Natura’s DNA and Forbes recognized Natura among the top 10 innovative companies in 2013. However, besides the current efforts, other step that company could take to translate innovation into performance is broadening the scope addressed by their open innovation initiatives. Most themes address product and communication, but currently one of the company’s main challenges is migrating from its traditional direct-selling channel to a multi-channel approach . The company has 1.4M sales representatives, but the direct-selling channel is shrinking. The new channels – e-commerce, physical stores, and pharmacies – are still relatively small and may cannibalize one another, potentially creating conflicts with its sales representatives force. How crowdsourcing could be used to address this go-to-market challenge?
Finally, an additional concern should be addressed: the competition in the Brazilian beauty industry is fierce and competitors may copy the products, messages and/or channels. What to do regarding strong competitors that may copy the innovations launched by Natura? How to ensure that all the efforts regarding open innovation create a sustainable competitive advantage?
 Robert G. Eccles and George Serafeim, “The Performance Frontier: Innovating for a Sustainable Strategy.”, https://hbr.org/2013/05/the-performance-frontier-innovating-for-a-sustainable-strategy, accessed November 2018.
 Natura Cocriando, http://cocriando.natura.net/cs/cocriando/homecocriando, accessed November 2018.
 Natura Campus, http://www.naturacampus.com.br/cs/naturacampus/home, accessed November 2018.
 Hackathon Natura Campus Media Lab, Vimeo, uploaded August 21, 2014, https://vimeo.com/104044105, accessed November 2018.
 Forbes, https://www.forbes.com/companies/natura-cosmeticos/#6cae9ec77e66, accessed November, 2018.
 Paul W. Farris, Leandro Guissoni, Kusum Ailawadi, and Murillo Boccia, “The Multichannel Challenge at Natura in Beauty and Personal Care”, https://hbr.org/product/the-multichannel-challenge-at-natura-in-beauty-and-personal-care/UV7303-PDF-ENG, accessed November 2018.