Only 7 in 12,000 product innovations pass the ultimate test

 |  By: Steve Johnson In: Advertising agencies | Agency creativity | Agency opportunities | Digital agencies | Marketing agencies

Do any of your clients plan to launch a new product this year? Or promote some product innovation? If so, a recent report will give you some useful insights into what works and what doesn’t.

Nielson reviewed 12,000 new consumer product initiatives launched in Western Europe over two years. They analysed them for:




Based on product initiatives in the UK, France, Italy and Spain, they identified nine types of innovation in 17 FMCG categories:



But Nielsen set the bar very high indeed, in order to find the real innovation stars in this vast landscape. Only seven met the top requirements out of the 12,000.

What were Nielsen's criteria?  There were three.

DISTINCTIVENESS. Delivering a new value proposition to the market. Excluded are mere ingredient reformulations, repackaging, size changes etc.

RELEVANCE. Generating a minimum of £10million in year-one sales.

ENDURANCE. Achieving at least 85% of year-one sales in year two.

Companies passing these gold-standard tests delivered genuine game-changing innovation. This involved:

  • defying preconceived consumer beliefs
  • excelling in disciplined proposition development
  • disrupting product categories
  • proving beyond doubt that success is no fluke

The report brings a fresh look at what success through innovation really means. Gimmicks don’t pass these tests. As Nielsen says: “Marketers don’t define innovation, consumers do.”  Nielsen found little evidence that simply increasing the quantity of product launches drove any growth at all. It’s quality that counts.

Why is innovation quite so important?

For a start, it’s one of the highest priorities for CEOs in Europe, according to the latest PWC annual survey. And polls suggest that 63% of consumers like it when new product options are offered. It also encourages switching – 56% are willing to switch to a new brand. And it generates buzz. 49% tell others about new products they have purchased.

The report had something to say about the creative sector helping to launch these innovations. They stress the need for genuinely original, fresh thinking, tethered to something that makes consumers tick – the solution to some real consumer struggles and frustrations. It’s all about asking impossible questions and genuinely understanding consumers. What causes them stress or confusion or inconvenience? What compromises do they have to make? Only by addressing these, and communicating the solutions well, can products make the grade.

So the implications for agencies in the marketing, branding, advertising and digital sectors are clear. Of course not every lucky agency can represent the top 7 out of 12,000 products. But as an expert in your field it might be handy for you to be able to quote insights from what is surely the toughest survey in the consumer world, as the gold standard benchmark.

And the report's authors are probably right to be tough. They talk of a consumer marketplace of intense competition, fast-evolving channels and a Europe of zero growth. The challenges could hardly be more apparent. But the biggest challenge of all is the fact that of all the new introductions they analysed, a huge 76% of them failed to make it to the end of their first year on the shelf. In this context, your insights could hardly be more valuable.



The Nielsen Breakthrough Innovation Report, European Edition

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