Giles Quick, Director of the Kantar Worldpanel Usage business, shows businesses how to tackle the challenges of growth through innovation.
In the long term, approximately 90% of all innovations fail. In the FMCG world, many never make it to the shelf. Of those that do, about 25% fail before the second year and 50% never make it to the third. The average lifespan of a product SKU is something like four years – so there’s an awful lot of wasted innovation.
Having said that, there’s plenty that brands can do to make sure their innovations land in that 10% pile of success stories. To harness moments to drive growth, I want to share three secrets to success.
Secret one: Let consumer problems be your guide
We believe that innovation is wasted because it’s not directed at solving consumer problems. Many brands look for category inspiration from within the category, so markets are often incredibly cluttered and the result is cannibalisation. The way out of this? Be brave, be distinctive, look outside of the category, find moments of opportunity and insert a solution into those moments. In short, find a problem and then solve it.
For example, add a new step to consumers’ everyday routines. Serve new needs, by positioning your product as fit for some other incremental use. Or occupy entirely new moments. Yoghurt, for instance, is beautifully segmented in this way – there’s a SKU for the diet moment, the indulgent moment, the lunchbox moment, the breakfast moment, the kids’ moment, the sharing moment and many more – which means the opportunity for category and portfolio growth genuinely exists. Uncover these blank spaces in consumers’ lives and offer a way to fulfil them.
Secret two: Not all moments have equal worth
Know the rules of engagement – most moments have implicit or even explicit rules around them, like the amount of time or money a consumer is prepared to spend. Different moments have different values.
Functional moments have a lower financial worth than emotional moments – they typically have half the monetary value of emotional moments, in fact. An average consumer will pay about £1.60 for a quick bite to eat at home or for food on the go – these are functional moments. Tune into emotionally driven moments though and it’s a different story – a romantic meal is worth £3.14 and a celebratory one is worth £4.21. So to innovate to succeed, connect with the heart rather than the head.
Secret three: Solutions are worth more than stuff
Moments are demand-drivers, so innovate with the end in mind. Remember, solutions are worth more than stuff. Twenty years ago, if I wanted my car cleaned, I bought a bucket, sponge and car shampoo, then did it myself. This is an example of selling stuff.
Selling a solution? That’s where I drive to Tesco and someone cleans my car while I shop. The desired result is a clean car – not stuff. Sky TV sells solutions – what I want to watch when I want to watch it, on my terms rather than on the supplier’s terms. Too many markets are driven by supply rather than demand. To succeed, meet the demand that exists by giving consumers a solution that is truly valuable and unique.