Innovation in the Food and Grocery Industry - Why is it important?
The food and grocery industry is a mature market, and in mature markets, New Product Development (NPD) is key in securing growth. Innovation in new product development can add value and command higher prices, and drive trade ups to more premium lines in order to drive customer spend.
Innovation is important for the industry in order to continue to drive sales growth by developing new products and services. Innovation is also important to the consumers because there is a level of inertia that comes with food and grocery shopping, so innovation is important to help break the monotony.
|
“We tend to have the same things like, just day after day to be honest.”
Winchester, Females, Family all ages, P/T |
What is ‘new’ and how long is it new for?
Shoppers have a very simple view of what constitutes a new product. Newness is defined in relation to themselves and their interaction with the products, rather then being defined by more tangible indicators such as length of time on the market.
|
“A new product is something you haven’t seen before.”
Winchester, Females, Family all ages, P/T |
Consumers do not appear to perceive new products as new for long. Again, this is defined by the products relationship to themselves rather than physical time available on the market. A new product is new until it has been purchased and used regularly, when it either then becomes a ‘fixture’ in the weekly shop, or is substituted for another product. Therefore newness is arbitrary and transient, and products become quickly subsumed into the normal shopping routine.
|
“When I’ve just bought it once, it’s still new. But because I do my shopping every week, if I’ve bought it for the last two months, then it’s not new.”
Winchester, Females, Family all ages, P/T |
Are shoppers looking for new products?
Only 7% of shoppers claim to actively seek out new products, compared to 39% who claim to make no effort to seek new products at all. This suggests that the success of a new product may depend on the shoppers’ attitude towards new products and that his inertia is a contributory factor to a product’s failure.
Approach to Shopping for New Products
Source: IGD Consumer Research, 2005
Why do shoppers buy new products?
The main driver for buying new food products is the desire for change, as most people buy the same products week in week out. Anything that helps to break this routine is welcomed.
The main reason for buying new non-food products is to make life easier. This is the basis of most grocery non-food items, such as household products. However, variety is also important, although not as much as for food.
- 26% of shoppers buy new food products to make a change
- 21% of shoppers buy new food products as a treat
- 22% of shoppers buy new non-food products to make life easier
- 21% of shoppers buy new non-food products to make a change
How can you influence shoppers in store?
Promotions have biggest impact, suggesting that most new product purchases are decided on in-store at the point of purchase.
TV adverts is main communication channel. Most new product launches combine these techniques but the influence of price promotions suggests that it is a must have to launch a new product.
- 52% of shoppers think price promotions influences them to buy new products
- 29% of shoppers think TV advertising influences them to buy new products
- 27% of shoppers think recommendation influences them to buy new products
- 20% of shoppers think in store signage influences them to buy new products
Back to Top ^
