In 2019, Samsung launched the Galaxy Fold – an modern, foldable cellphone mannequin that allowed one machine to work as each a cellphone and a pill. When absolutely prolonged, the display 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 completely different apps on the display directly.
So what occurred?
Regardless of pushing the boundaries of what was achievable within the smartphone market, the Galaxy Fold struggled to attach with customers, 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 proved too small to be actually helpful. Moreover, the machine exhibited appreciable fragility. In hindsight, it is clear that Samsung didn’t resonate with customers and justify the almost $2,000 price ticket.
This instance underscores the concept mere innovation will not be sufficient. Whereas customers 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 features to craft merchandise that genuinely improve the day-to-day lives of customers and drive gross sales development.
Client conduct is altering
There was a seismic change in the way in which customers behave during the last decade. A number of disruptive traits have converged to shift the buying journeys many customers take, and the issues that go into that buy too. Whereas the added flexibility and comfort of multichannel retail is giving customers extra routes to buy than ever earlier than, stagnating international development and excessive inflation are placing extra stress on family budgets. With the lingering results of Covid, geopolitical disruptions and rising considerations about sustainability added to the combo, it’s clear that shopper sentiment has modified considerably.
At present, 47% of customers report a desire for proudly owning fewer however increased high quality objects. When contemplating shopping for a small home equipment (SDA) for instance, 64% of customers contemplate 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 enjoying out within the ongoing battle between main kitchen equipment model Russell Hobbs with relative newcomer Ninja. Whereas the previous has a fame for excellence, the latter is profitable market share via a give attention to modern options. There may be nonetheless an entrenched benefit for established manufacturers, notably people who have a trusted fame, as 43% of customers will solely purchase from a well known model. In Germany, there have been an enormous variety of new entrants into completely different classes during the last three to 5 years, together with 84 manufacturers advertising air remedy and 31 doing the identical for hair clippers. Nevertheless, solely every one in every of 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 customers need from product innovation
Client confidence started to stabilize in 2023 at a low stage. Many customers have tailored to life in a poly-crisis of excessive inflation and stagnating development by lowering discretionary spending in sure segments or throughout the board. On this setting, innovation for the sake of innovation is just not going to persuade cautious customers to make a purchase order. As a substitute, it’s strategic innovation that has a direct influence on their lives that can have the most important influence.
In 2023, 4 areas have emerged as the important thing methods for manufacturers to focus on innovation funding in ways in which resonate with customers throughout all revenue teams:
- Simplifying duties – Folks need merchandise that assist them optimize their time. This may be seen within the development 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 – Probably the most frequent examples of that is the pattern for distant management of gadgets. From digital central heating to lights managed through smartphone apps, customers are exhibiting a desire for merchandise that enable them to manage techniques remotely via their related gadgets.
- Aspirational design – Shoppers nonetheless present a need to personal and establish with merchandise which can be seen as fascinating and unique.
- Enabling enhanced measurability – Better shopper give attention to sustainability financial savings in addition to well being and wellbeing are driving customers 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 little thing from their sleep to blood stress.
“Regardless of excessive ranges of financial uncertainty, customers 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 customers 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, World Advisor gfkconsult
Particular person teams are driving development
One other method to goal innovation funding in a method that may higher facilitate gross sales development is to give attention to particular shopper teams. There are pockets of market development coming from teams like content material creators, players and health fanatics. Manufacturers that may present these teams with modern new options or reasonably priced premium worth factors couldn’t solely drive a development in gross sales however assist place their manufacturers nicely for when the market recovers.
The gaming business, for instance, is big. Yearly billions of customers 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 subsequent few years, creating an enormous alternative for manufacturers that may assist players obtain increased 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 gentle and sound gear.
Understanding the place and the right way to innovate
For manufacturers trying to profit from their innovation investments, it’s important to start out by wanting on the present market setting and the way it’s influencing shopper ache factors and motivation. On this state of affairs, innovation doesn’t need to re-invent the wheel – it has so as to add worth to individuals’s on a regular basis lives. Whether or not it’s via monitoring well being metrics or serving to them cook dinner dinner for his or her youngsters in minutes, customers need merchandise that justify their buy every day.
Innovation requires perception. Keep forward of your market with GfK’s shopper intelligence options.
