Commentary

Consumers Have Strong Appetite For Innovation

According to results from a recent Nielsen report, based on a survey of 30,000 consumers across 60 countries, 56% say friends and family, and 52% say TV ads are the leading sources of information about new products for consumers.

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For the purposes of the study, a new product is defined as any item that the consumer has never purchased in the past. And, for product awareness, Robert Wengel, Senior Vice President And Managing Director Of Nielsen Innovation, says “Media fragmentation is largely the cause for the decline in the reliance on TV as a top source for new product awareness.”

Wengel says that “… while TV offers the widest audience reach, a multi-media approach is necessary to connect with consumers at all touch points. Brand awareness studies show that the combination of TV and digital advertising can increase brand recall by 33% and message recall by 45% compared to TV ads alone.

Consumer Source of New Product Information (Global Average)

 

 

 

 

Source

2012

2015

Change (% points)

Owned

   Friends/family told me about it

60%

56%

4

   Professional/expert told me about it

34%

23%

11

   Articles/content on frequently visited news or     lifestyle websites

17%

21%

4

   Internet forum/message board

18%

17%

1

   Social media postings

15%

26%

11

   Active internet searching

39%

44%

5

Paid

   TV ads

63%

52%

11

   Newspaper/magazine

32%

27%

5

   Internet ads such as banner or pop-up ads

25%

26%

1

   Outdoor billboards or posters

18%

15%

3

   Direct mail

12%

11%

1

   Radio ads

13%

10%

3

   Publictransport ads

9%

9%

-

   Videosharing websites

8%

9%

1

   Attending a public event such as a concert, festival, or sports match

10%

4%

6

Earned

   Saw it in a store

48%

48%

-

   Received a free sample

56%

31%

25

   Brand/manufacturer web page

27%

25%

2

   Marketing emails

10%

11%

1

Source: Nielsen, Q1 2015, Q1 2012, July 2015

Consumers have a strong appetite for innovation, says the report. They’re increasingly demanding and expect more choice than ever before. Around the world, 63% of respondents like it when manufacturers offer new products, and 57% purchased a new product during their last grocery-shopping trip. And:

  • Consumers want more new products on the market that are affordable, healthy, convenient and environmentally friendly
  • The drivers of new product purchasing, include affordability, convenience, brand recognition and novelty
  • Respondents in developing markets say they are more inclined to try new products, and they lead the way in self-reported new product purchasing
  • Earned media sources are growing in importance for new product information gathering, but reliance on traditional sources is still strong
  • Social media’s sphere of influence shows tremendous growth since 2012
  • Millennials and Generation Z respondents say they use several traditional advertising sources at comparable, or even greater levels than older generations

Brand competition is intense and shelves are crowded. In Western Europe, 12,000 innovations were launched in four markets across 17 product categories between 2011 and 2013. In the U.S., there have been more than 20,000 launches since 2008.

Innovation isn’t just happening in developed markets, says the report. In India, there were more than 10,500 new launches in the FMCG sector in 2014. Competition isn’t the only hurdle, says the report. Manufacturers must also contend with growing media fragmentation, evolving retail distribution channels and tightening budgets, among other obstacles. As a result, the vast majority of new product introductions are taken out of distribution before the end of their launch year. Of over 60,000 new SKUs introduced in Europe over the last years, just 55% made it to 26 weeks, and only 24% lived to reach a full year.

Top Reasons For Buying New Products (% of Respondents)

 

Location

Top Reasons

Asia-Pacific

Europe

Africa/Middle East

Latin America

North America

Premium value

25%

 

 

 

 

Convenience to Use

24%

 

23%

 

 

Affordability

21%

25%

29%

26%

25%

Novelty

 

25%

 

 

27%

Indulgance

 

20%

 

26%

 

Family friendly

 

 

23%

25%

 

Brand Recognition

 

 

 

27%

25%

Source: Nielsen, Q1 2015, Q1 2012, July 2015

When you hear “early adopter” it may conjure up an image of a tech-savvy teenager or college student willing to wait in line for the latest gadget. But this image is only partially accurate, says the report.

While the youngest respondents are more likely to say they have purchased a new product during their last grocery shopping trip than their older counterparts, those categorized as ‘early adopters’ only show a slight age bias. That is, compared to the total sample, younger respondents are only slightly overrepresented among early adopters.

Taddy Hall, senior vice president, Nielsen Innovation, said “… early adopters aren’t just younger consumer… consumers of all ages are looking for products that make their lives better… while Millennials are garnering a fair amount of recent time and attention… do not lose sight of the needs across all age segments…”

Purchased A New Product On Last Grocery-Shopping Trip

Cohort

% of Purchasers

Generation Z (ages 15-20)

62%

Millennials (ages 21-34)

66%

Generation X (ages 35-49)

53%

Baby boomers (ages 50-64)

41%

Silent generation (ages 65+)

25%

Source: Nielsen, Q1 2015, Q1 2012, July 2015

More than half 52% of global respondents cite TV ads a top source of new-product awareness, the second highest percentage of the sources reviewed, but a decline of 11 percentage points from Nielsen’s 2012 survey. The only paid-advertising sources to increase in importance were Internet ads and video-sharing websites, rising one percentage point each.

As the media landscape evolves, so do the sources consumers use to find out about new products, and the reliance on earned media is growing while some paid media sources are declining. For the purposes of this study, the sources consumers say they used to get information about new products are grouped into three categories:

Owned Media

  • Saw it in-store
  • Received a free sample
  • Brand/manufacturer web page
  • Marketing emails

Earned Media

  • Friends/family
  • Professional/expert
  • Job/work
  • Articles on news or lifestyle websites
  • Internet forum/ message board
  • Social media postings
  • Active internet searching

Paid Media

  • TV ads
  • Newspaper/magazine
  • Internet ads
  • Outdoor billboards or posters
  • Direct mail
  • Radio ads
  • Public-transport ads
  • Video-sharing websites
  • Public event (concert, festival, or sports match)

But creative execution counts, too, says the report. An ad should not only clearly demonstrate usage; emotional context is also important to ensure the message is memorable and persuasive. Put simply, outstanding creative sets its self apart by balancing imagination with meaningful content.

Developing the right product is only part of the success equation, concludes the report. Opportunities may ultimately be won or lost in the store, and marketers need a strong activation strategy to generate awareness and trial. And all of this must be supported by a positive product experience.

For additional information from Nielsen, please visit here.

 

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