In 2019, Samsung launched the Galaxy Fold – an modern, foldable telephone mannequin that allowed one gadget to work as each a telephone and a pill. When absolutely prolonged, the display was over 18cm lengthy. The telephone additionally featured some market-leading options, reminiscent of having the ability to switch an app from telephone mode to pill mode seamlessly and run three totally different apps on the display 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 customers, highlighting the significance of addressing shopper pains and motivations as a bedrock of strategic innovation. Firstly, when the telephone 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 gadget exhibited appreciable fragility. In hindsight, it is clear that Samsung did not resonate with customers and justify the practically $2,000 price ticket.
This instance underscores the concept that mere innovation is probably not 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 points to craft merchandise that genuinely improve the day-to-day lives of customers and drive gross sales progress.
Shopper habits is altering
There was a seismic change in the way in which customers behave during the last decade. A number of disruptive tendencies have converged to shift the buying journeys many customers take, and the concerns 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 world progress and excessive inflation are placing extra strain 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.
As we speak, 47% of customers report a choice for proudly owning fewer however increased high quality gadgets. 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 all the time search for a dependable model. We will 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 status for excellence, the latter is profitable market share by way of a deal with modern options. There may be nonetheless an entrenched benefit for established manufacturers, notably people who have a trusted status, as 43% of customers will solely purchase from a widely known model. In Germany, there have been an enormous variety of new entrants into totally different classes during the last three to 5 years, together with 84 manufacturers advertising and marketing air remedy and 31 doing the identical for hair clippers. Nevertheless, solely every one among these has managed to realize 2% market share. On the subject of washing machines, dishwashers or hairdryers, the image is even more durable with not one of the new entrants gaining 2% market share.
Understanding what customers need from product innovation
Shopper 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 progress by decreasing discretionary spending in sure segments or throughout the board. On this setting, innovation for the sake of innovation just isn’t going to persuade cautious customers to make a purchase order. As an alternative, it’s strategic innovation that has a direct impression on their lives that may have the largest impression.
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 – Individuals need merchandise that assist them optimize their time. This may be seen within the progress of air fryers and robotic vacuum cleaners. Persons 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 inexpensive premium product ranges.
- Permitting better experiences – One of the vital frequent examples of that is the pattern for distant management of units. From digital central heating to lights managed through smartphone apps, customers are exhibiting a choice for merchandise that permit them to manage techniques remotely by way of their related units.
- Aspirational design – Shoppers nonetheless present a want to personal and determine with merchandise which are seen as fascinating and unique.
- Enabling enhanced measurability – Better shopper deal with 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 monitor every little thing from their sleep to blood strain.
“Regardless of excessive ranges of financial uncertainty, customers nonetheless have a really clear concept of what they need from the manufacturers they work together with. If they don’t seem to be changing or upgrading current merchandise, then customers are looking out for merchandise that assist them lead happier and more healthy lives. Manufacturers want to know how their merchandise can align with these goals.”
Sheila Kurniadi, World Advisor gfkconsult
Particular person teams are driving progress
One other option to goal innovation funding in a means that may higher facilitate gross sales progress is to deal with 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 modern new options or inexpensive premium worth factors couldn’t solely drive a progress in gross sales however assist place their manufacturers nicely for when the market recovers.
The gaming trade, 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 avid gamers 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 tools.
Realizing the place and how one can innovate
For manufacturers seeking to profit from their innovation investments, it’s important to start out by trying 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 by way of monitoring well being metrics or serving to them prepare dinner dinner for his or her youngsters in minutes, customers need merchandise that justify their buy each day.
Innovation requires perception. Keep forward of your market with GfK’s shopper intelligence options.
