LONDON: Just 18 product launches out of more than 8,000 across Western Europe in the past two years achieved "breakthrough innovation" status, according to a new report which argues that successful innovation is a science and is not a matter of chance.
Researcher Nielsen analysed 8,650 FMCG product launches for its 2015 Breakthrough Innovation Report. To be classed a breakthrough innovation winner, product launches had to meet three criteria: deliver a new proposition (not just a refinement); generate at least £10/€10 million sales in their first year of trading; and maintain at least 90% of their sales in the second year.
Among the 18 winners were Ariel 3-In-1 Pods (detergent), Cadbury Dairy Milk Marvellous Creations (chocolate), Garnier Fructis Schadenlöscher (hair care), Lay's Xtra (salty snack), Nivea Cellular Anti-Age (body cream) and Sure Compressed (deodorant).
"Three out of four new SKUs fail to generate even £100,000 sales in their first year of trading and are often delisted by retailers," explained Marcin Penconek, vice president of Nielsen's innovation practice in Europe, and co-author of the report.
"Breakthrough innovation is extremely rare but, despite perceptions amongst some, it's neither random, nor down to luck, nor magic," he added. "There are clear patterns behind why consumers pull some products and not others into their lives."
The report suggested these patterns have less to do with the consumer or the product and more to do with the specific circumstances around the job to be done.
"It's the idea that people don't so much buy products as hire them to perform jobs in their lives," said Penconek. "Successful innovators display empathy – they clearly identify the circumstance where consumers struggle or have unmet aspirations and innovate around these."
In the case of Sure, the Unilever-owned deodorant took a big-picture approach, identifying waste as an area where the brand and category had a major impact on the environment and society.
Accordingly, the new product contains 50% less gas and 25% less aluminium and is being applied to all Unilever deodorant brands. Unilever is also seeking to share the innovation with other manufacturers.
Data sourced from Nielsen; additional content by Warc staff