Chapter 1 -
Aisle be there: Unpacking the new needs of shoppers
If it’s what’s inside us that counts, then counting just became more important.
Consumer goods brands and retailers face the challenge of not only understanding the subtleties of consumer actions but also anticipating them, tailoring their strategies to forge emotional connections and instilling trust. In other words, it's not just about offering the right products, it's about creating an emotional connection with consumers and convincing them that your brand is their brand, especially if it costs a little more.
To achieve this, it's essential to travel beyond the obvious and explore the hidden drivers of human behaviour. Take, for example, the demand for certain premium products among struggling shoppers. At first glance, this might seem counter-intuitive - after all, when times are tough, shouldn't people be cutting back on non-essential items?
But the reality is more complex. Struggling shoppers are looking for ways to treat themselves, even on a tight budget. They might not be able to afford a fancy vacation or a night out, but they can still indulge in a premium feel beverage or snack.
This insight provides a roadmap for brands and supermarkets looking to tap into this growing market among those with an eye on price. By offering premium products at a well-justified price point, brands can cater to consumers who seek value in terms of both quality and price. Using targeted marketing to reach struggling shoppers where they are allows companies to establish an emotional connection with their customers and build loyalty in the process.
However, it is essential to understand that affordable pricing doesn't imply cheapness; instead, it means that the price feels reasonable based on the product's ability to address consumers' important needs, making it permissible. For example, a consumer may be willing to spend £5 on toothpaste if it effectively addresses gum recession, a critical issue they face. By delivering a high-quality product that meets a specific need, brands can justify the price, satisfy customers, and create lasting brand loyalty.
The same principles apply across the consumer goods landscape, from alcohol to household products. By focusing on the needs and preferences of different pressure groups, and by tailoring new product strategies accordingly, brands can create a competitive advantage in even the most crowded markets.
The reality is that innovative new products can sell well when done right. That said, the return to pre-pandemic NPD levels is a slow one.
In many ways, the numbers speak for themselves in terms of the trend: innovation levels are low and only just beginning to come back. But those who invest in new products that meet the evolving needs of shoppers can still win.
The top NPDs in 2022 were able to find ways of appealing to the growing number of struggling households. Seven out of the top 10 over-indexed with the struggling group. And interestingly, the managing group of households gravitated to what might be considered upgrades from the basics — to premium, or premium-feel, food and drink products. Madri beer, the top NPD of the year in Britain, was high on their list. Part of this success could be a reflection of taking an out of home beer and making it available for in-home consumption to save money whilst maintaining a premium vibe.
But it's not just about the products themselves. It's also about the way they are presented, packaged, and marketed. By investing in innovative packaging that enhances the product experience and provides added value to customers, brands can create a sense of excitement and anticipation around their products, and help to build an emotional connection with consumers. Madri beer is a great example because it also leaned on the flavour attributes to align with the Spanish provenance messaging to create a total user experience, despite the beer being manufactured in Britain.
And perhaps most importantly of all, it's about being agile and adaptable in the face of changing market trends and demands. By leveraging data and analytics to identify trends and opportunities for growth, and by adopting a test-and-learn approach to trialling new products and marketing strategies, consumer goods brands can stay ahead and create new growth opportunities even in the most challenging of times.
The consumer goods industry is facing a lot of challenges, but there are also a lot of opportunities. Brands that are able to adapt to changing consumer preferences and find ways to offer value to consumers are likely to be more successful in the long run.
Top 10 NPDs of 2022
