In 2019, Samsung launched the Galaxy Fold – an progressive, foldable cellphone mannequin that allowed one system to work as each a cellphone and a pill. When absolutely prolonged, the display screen was over 18cm lengthy. The cellphone additionally featured some market-leading options, resembling with the ability to switch an app from cellphone mode to pill mode seamlessly and run three totally different apps on the display screen without delay.
So what occurred?
Regardless of pushing the boundaries of what was achievable within the smartphone market, the Galaxy Fold struggled to attach with shoppers, highlighting the significance of addressing shopper pains and motivations as a bedrock of strategic innovation. Firstly, when the cellphone was folded, it turned as thick as two telephones and inconvenient to hold. Secondly, the folded display screen proved too small to be actually helpful. Moreover, the system exhibited appreciable fragility. In hindsight, it is clear that Samsung did not resonate with shoppers and justify the practically $2,000 price ticket.
This instance underscores the concept mere innovation will not be sufficient. Whereas shoppers do reply to novel options and capabilities, success in innovation requires a deeper understanding of shopper ache factors and motivators. Manufacturers should domesticate empathy towards these points to craft merchandise that genuinely improve the day-to-day lives of shoppers and drive gross sales progress.
Shopper conduct is altering
There was a seismic change in the best way shoppers behave over the past decade. A number of disruptive tendencies have converged to shift the buying journeys many shoppers take, and the issues that go into that buy too. Whereas the added flexibility and comfort of multichannel retail is giving shoppers extra routes to buy than ever earlier than, stagnating international progress and excessive inflation are placing further stress on family budgets. With the lingering results of Covid, geopolitical disruptions and rising considerations about sustainability added to the combination, it’s clear that shopper sentiment has modified considerably.
Immediately, 47% of shoppers report a desire for proudly owning fewer however greater high quality objects. When contemplating shopping for a small home equipment (SDA) for instance, 64% of shoppers take into account product options as an important issue – in comparison with 54% who will at all times search for a dependable model. We are able to see this taking part in out within the ongoing battle between main kitchen equipment model Russell Hobbs with relative newcomer Ninja. Whereas the previous has a popularity for excellence, the latter is successful market share by way of a concentrate on progressive options. There’s nonetheless an entrenched benefit for established manufacturers, notably those who have a trusted popularity, as 43% of shoppers will solely purchase from a widely known model. In Germany, there have been an enormous variety of new entrants into totally different classes over the past three to 5 years, together with 84 manufacturers advertising and marketing air remedy and 31 doing the identical for hair clippers. Nonetheless, solely every one in all these has managed to achieve 2% market share. On the subject of washing machines, dishwashers or hairdryers, the image is even harder with not one of the new entrants gaining 2% market share.
Understanding what shoppers need from product innovation
Shopper confidence started to stabilize in 2023 at a low stage. Many shoppers have tailored to life in a poly-crisis of excessive inflation and stagnating progress by decreasing discretionary spending in sure segments or throughout the board. On this surroundings, innovation for the sake of innovation shouldn’t be going to persuade cautious shoppers to make a purchase order. As an alternative, it’s strategic innovation that has a direct affect on their lives that can have the largest affect.
In 2023, 4 areas have emerged as the important thing methods for manufacturers to focus on innovation funding in ways in which resonate with shoppers throughout all revenue teams:
- Simplifying duties – Folks need merchandise that assist them optimize their time. This may be seen within the progress of air fryers and robotic vacuum cleaners. Individuals are prepared to purchase much less usually however spend extra on merchandise they view as including worth to their lives. This may be seen within the success of reasonably priced premium product ranges.
- Permitting better experiences – One of the widespread examples of that is the pattern for distant management of gadgets. From digital central heating to lights managed by way of smartphone apps, shoppers are displaying a desire for merchandise that enable them to regulate programs remotely by way of their linked gadgets.
- Aspirational design – Customers nonetheless present a want to personal and determine with merchandise which are considered as fascinating and unique.
- Enabling enhanced measurability – Larger shopper concentrate on sustainability financial savings in addition to well being and wellbeing are driving shoppers towards merchandise that allow nearer monitoring of ongoing efficiency. This may be seen most strongly within the wearables market, the place individuals can now observe every part from their sleep to blood stress.
“Regardless of excessive ranges of financial uncertainty, shoppers nonetheless have a really clear thought of what they need from the manufacturers they work together with. If they don’t seem to be changing or upgrading present merchandise, then shoppers are looking out for merchandise that assist them lead happier and more healthy lives. Manufacturers want to grasp how their merchandise can align with these goals.”
Sheila Kurniadi, International Guide gfkconsult
Particular person teams are driving progress
One other technique to goal innovation funding in a method that may higher facilitate gross sales progress is to concentrate on particular shopper teams. There are pockets of market progress coming from teams like content material creators, avid gamers and health fanatics. Manufacturers that may present these teams with progressive new options or reasonably priced premium worth factors couldn’t solely drive a progress in gross sales however assist place their manufacturers properly for when the market recovers.
The gaming business, for instance, is large. Yearly billions of shoppers buy video games, consoles and a variety of equipment starting from specialist furnishings to keyboards and VR gear. The market can be anticipated to proceed rising over the following few years, creating an enormous alternative for manufacturers that may assist avid gamers obtain greater efficiency experiences or simplify their setup. The rise in content material creation can be serving to to stabilize gross sales of high-end cameras and different specialist mild and sound tools.
Understanding the place and the best way to innovate
For manufacturers trying to benefit from their innovation investments, it’s important to begin by trying on the present market surroundings and the way it’s influencing shopper ache factors and motivation. On this situation, innovation doesn’t must re-invent the wheel – it has so as to add worth to individuals’s on a regular basis lives. Whether or not it’s by way of monitoring well being metrics or serving to them prepare dinner dinner for his or her youngsters in minutes, shoppers need merchandise that justify their buy each day.
Innovation requires perception. Keep forward of your market with GfK’s shopper intelligence options.
