When contemplating launching a new product or service into a crowded and competitive marketplace, the sobering statistic that three-quarters of new CPG products fail to perform adequately cannot be far from marketers’ minds. Defying these odds is no mean feat, and requires effort and smart thinking at all stages of the innovation process. One area that is of paramount importance is to truly understand the target customer. Who is this product for? What are their unmet needs? And what will make them hand over their hard-earned cash?
Answering these questions satisfactorily can involve examining consumers from many angles, and looking not just at the here-and-now but taking the wider view of how their lives are evolving and what will be their needs five or ten years in the future. Combined with the almost altruistic desire to understand how we can make people’s lives better, brands also have to make hard-headed commercial decisions about a particular group. Should we be appealing to them more, or should we be focussing our marketing efforts elsewhere?
One group of consumers that has been attracting a good deal attention from the world’s marketers is of course the Millennials, who are rightly seen as representing an important source of current and future revenue growth, and whose different attitudes and behaviours are expected to disrupt multiple categories from automotive to travel to financial services.
With the eldest of this group now firmly in parenting territory, one recent area we explored was how to help millennial parents get their shopping done. Our Consumer Life analysis showed that as a relatively affluent but time-poor segment with a liking for prestige, they place above-average important on convenience and are prepared to pay a premium for products and services that make their lives easier.
There are certainly many opportunities for innovative ways to help this group get on with their busy lives.
Despite the current focus on Millennials, it is important not to underestimate the continued and growing importance of older consumers to future revenues around the world. Indeed, recent analysis has shown that those aged over 60 in mature markets of the world will account for fully one third of consumption growth to 2030. Again, in order to fully unlock the potential that this group poses it will be necessary to understand what they’re looking for and how to meet their needs.
Consumer Life data show that while Millennials are more likely than average to look for innovations that are unique, fun and harness the latest technology, older consumers over-index on a larger number of factors including finding easier and simpler ways of doing things, as well as saving money. The key learning here is that far from being conservative and averse to change, older consumers could be the most receptive to the right kind of innovation that enhances their lives in practical ways.
Looking specifically at the Smart Home category, which is the focus of our up-coming Driving Innovation event, while Millennials could appear at first glance to be the most promising target as early adopters of technology, there is a case to be made for focussing on the needs of older consumers instead. They are more likely to be home owners, and to have sufficient disposable income. In particular, the so-called sandwich generation has many and often complex needs relating to both their parents and their children that could be alleviated by the right innovations in this category.
Identifying a clearly-defined target in this way, and pinpointing consumer needs from an early stage, is the way to create a robust basis for further development throughout the innovation journey. In our Driving innovation event we’ll explore together the best ways to determine a powerful target audience that improve your chances of success.