1 in 4 consumer products fail after first year of launch: research
That is the take home message from the 2016 Breakthrough Innovation Report released by Nielsen last week.
The research highlights selected products that are considered ‘breakthrough innovations’ and outlines critical and actionable lessons for the grocery industry.
10,770 consumer products introduced to market during 2014 were reviewed as part of the study. Products were assessed based on distinctiveness, relevance and endurance – whether they delivered a new value proposition, generated a minimum of $4.5 million in annualised first year sales and achieved at least 90 per cent of year one sales in their second year.
Results showed that 25 per cent of new products did not stay on the shelf after the first year of launch and only 48 out of 10,770 product launches in the Australian grocery category in 2014 were considered ‘breakthrough innovations’.
“The report details why innovation is vital in today’s increasingly competitive environment,” said Thais Gill, innovation practice leader at Nielsen. “Successful innovation is the key to delivering real incremental dollar growth – it’s critical to get right and it’s astounding how many get it wrong.”
Helga’s Lower Carb Bread, Old El Paso Stand ‘N Stuff, McCain’s Healthy Choice Frozen Ready Meals and Arnott’s Shapes Light & Crispy were among some of the Breakthrough WInners for 2016.
“One of the key themes to emerge from our analysis of ‘Breakthrough Winners’ is that these innovations succeed because they solve a consumer’s challenge – people hire new products to help resolve a struggle,” Gill said. “Take for example, the launch of Old El Paso Stand ‘n’ Stuff. Its unique flat bottomed shaped tacos [were] designed to address the mess involved in the process of making and eating tacos.”
The research indicates that innovation initiatives that are successful resolve well-defined yet poorly performed jobs with purpose and efficiency.
“Lessons to take away from this year’s winners is that breakthrough innovation requires a deep understanding of consumer pain points and problems – it is hard work but is attainable for any company of any size in any category,” Gill concluded.