Consumer trends are more changeable and fleeting than ever in a world that’s changed dramatically for CPG brands. The rise of online shopping created the expectation of near-instant gratification. The growing economic power of a younger generation changed the marketing messages that resonate with consumers; 33% of Generation Z shoppers will buy from a brand with shared values, compared to 12% of Baby Boomers.
Consumer insights indicate that people today are more willing to try new brands, with 37% experimenting during the COVID-19 pandemic. The growing complexity of supply and distribution chains – along with the recent disruptions, thanks to COVID-19 – has increased consumer packaged goods (CPG) costs by 50%. Launching a new CPG product has always been expensive, but the stakes are even higher in today’s landscape.
Why new products often fail
The average R&D cost to bring a new CPG product to market is $15MM. Despite huge investments, 95% of those products fail, typically for one of four reasons:
- Product-market fit issues. The new product simply doesn’t solve a real problem for consumers.
- Wrong target audience. Marketing to the wrong consumer base will not get a positive response.
- Competition and demand problems. Competitors may have come out with a better product first, or perhaps consumer trends are no longer in your favor and demand has waned.
- Distribution mismatch. Shoppers may not be aware of your product if it’s sold through retailers they don’t frequent.
Consumer insights into emerging trends are key to ensuring a new product solves real problems, is marketed to the right audience, and is truly in demand. Unfortunately, the old ways of gathering consumer insights and trends – market research, focus groups, and in-person surveys—can’t keep up with rapidly changing consumer behaviors for a few reasons:
- The approaches aren’t scalable and rely on small sample sizes.
- The data ages quickly.
- It can be difficult for some interviewees to deliver negative feedback, resulting in falsely positive data.
- Non-customers aren’t included in focus groups and interviews, ignoring a huge potential market.
These antiquated methods of exploring consumer trends explain why new product launches are so prone to failure. Retailers that attempt to understand consumer insights and emerging trends using this data really don’t have enough information to launch a successful product.
How to predict consumer trends
There’s a better way to put all consumers – existing and potential customers – at the heart of all decision-making: connected, contextualized voice-of-the-customer data from thousands of sources.
This kind of varied, extensive data has many advantages over the old methods of accessing consumer insights and trends. It’s infinitely scalable, and data is constantly refreshed and accurate, resulting in superior decisions; Skai’s own research shows that decision-making accuracy improves from 26% when using one data source to 97% when using five data sources. Combining data sources gets to the “why” behind consumer trends, which allows CPG brands to:
- Understand consumer behavior and motivations over time
- Identify purchase hands across various ecommerce channels
- Explore unmet consumer needs
- Monitor consumer sentiment towards brands and products
- Predict future needs and forecast the size of the opportunities
Accessing consumer insights and trends with Skai
Skai analyzes data from thousands of voice-of-consumer sources to give brands the unbiased intelligence they need to meet current and future expectations. Skai’s newest innovation, Ask MI, allows everyone – even those who aren’t data-savvy – to access the consumer insights, emerging trends, and market data that drives improved product innovation. With Ask MI’s intuitive search bar, decision-makers can ask questions like:
- What product attributes are most discussed by consumers?
- Which brands are most discussed by consumers?
- What are the established, emerging, and declining product attributes discussed by consumers?
- What are the unmet consumer needs in this category?
- How has consumer sentiment towards brands and attributes changed over time?
- Which brands are leading, growing and declining in consumer discussions?
- Which product attributes are most discussed by key opinion leaders and influencers in my category?
How Skai’s consumer insights drove innovation in vitamins, supplements, and minerals (VMS): a case study
Reckitt is an innovative health and hygiene brand with ambitious goals for growth over the next five years. Recognizing that new product innovation—fueled by consumer insights —was key to their success, the central analytics team spent two years building its own insights platform. They quickly realized that their internal tool provided insights into which products and ingredients were selling, but not why. Since their internal data was backward-looking, it also couldn’t explain which consumer trends were building momentum now. For these consumer insights and emerging trends, Reckitt turned to Skai to provide a fuller picture with external data from consumer reviews, scientific research, key opinion leader posts, forums, blogs, patent filings, and more.
With Skai’s data, Reckitt assessed the market opportunity for a new gummy product with a particular ingredient. Their internal tool showed that sales of a competitive gummy using this ingredient were declining, but they couldn’t tell why. Skai’s data provided the answer: negative consumer sentiment around taste and digestibility. And they saw something else in Skai’s consumer insights: a big increase in positive sentiment around the ingredient when it comes to immune health.
Now Reckitt knew that there was room in the market for their gummy concept, as long as they focused their marketing messaging on the benefits and features that resonate with consumers. In this case, understanding why a certain ingredient was appealing was key to their success. It would have been all too easy to make the same mistakes as their competition in creating a gummy that didn’t meet customer expectations. Read more about this case study.
PepsiCo develops a new product innovation strategy with Skai’s consumer insights: a case study
PepsiCo’s portfolio of beverage brands has long used data intelligence and analytics to conduct its portfolio strategy. However, each brand did so in isolation, focusing only on their narrow category (such as iced tea, soda, etc.). This approach was successful, but PepsiCo’s Portfolio Insights and Analytics team knew that there were cascading consumer trends that transcended individual categories and could lead to truly innovative new products that would never be considered with a narrow product development approach.
The team wanted to expand their product development process by including consideration of broad product attributes (like features, ingredients, and packaging) and consumer benefits (like immune health) across the entire beverage landscape. PepsiCo turned to Skai to provide the scalable external data framework they needed to access contextual intelligence down to the attribute level. With Skai’s cross-category consumer insights, PepsiCo was able to:
- Uncover and evaluate attribute-level trends across categories, using consumer insights as well as competitive and product landscape data
- Dive deeper into the origin and evolution of specific consumer trends
- Discover how different categories influence and impact each other for early intelligence on the cascading of consumer trends across categories
PepsiCo’s Portfolio Insights and Analytics team used the Skai platform to assess white space opportunities for bubly, their sparkling water brand. Their analytics revealed consumer insights and emerging trends around product benefits – the attributes most likely to resonate with consumers and transform bubly into a billion-dollar brand. As Jessica Yankell, Sr. Manager of Innovation and Portfolio Transformation Insights at PepsiCo, put it: “The value of Skai goes beyond what we can measure. It has helped us to build an entirely new capability and surface granular insights we’ve only ever dreamed of having access to before. These insights shape the future direction of our business and that is immeasurable.” Read more about PepsiCo’s revolutionized approach to product innovation.
What consumer insights, emerging trends, and market data would help your brand create the next successful CPG product? Contact us for a personalized demo to find out.