As supply exceeds demand, user needs are increasingly shifting from functional requirements to emotional needs. However, there is a lack of in-depth research on how to meet users’ emotional needs during the process of product development. This paper aims to explore how to meet users’ emotional needs through product innovation. Focusing on a leading smart home appliance company with strong product innovation competitiveness, it explores how the company drives product-user interaction innovation to meet emotional needs through case studies. The study uncovers three innovative mechanisms for product interaction: scenario-based experience, instant interactive feedback, and embodied interaction. Scenario-based experience identifies and addresses user pain points by constructing common usage scenarios; instant interactive feedback uses AI and big data technology to quickly respond to users’ emotional needs; embodied interaction enhances the emotional bond between products and users through continuous user participation and data feedback. The mechanisms help the company move beyond mere functional innovation and turn their attention to users’ emotional needs, thus achieving theoretical innovation. This paper provides practical guidance for companies to enhance their product innovation capabilities in an oversupplied market environment.