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Strategies for Success in Innovation and New Product Development

1/15/2024
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The innovation and launch of new products is essential for business growth but, often, companies fail to succeed as they struggle to identify and miss market opportunities. To make confident strategic decisions, there are two critical steps companies need to take. Firstly, to identify new product launches (Innovation) and what consumer needs they address and, secondly, to analyse consumer trends (Megatrends) to understand how those consumer needs are changing over time. This combined approach, monitoring innovation and consumer trends, helps businesses with several applications:

  • Benchmarking portfolios against the broader category or seeking inspiration from adjacent categories for strategic innovation focus and competitive edge.
  • Informing a business case for innovation investment with data and insights that clearly indicate the direction of growth and what products will resonate with the target market.
  • Identifying gaps between what brands are innovating for and the remaining unmet consumer need.

In this article we use Euromonitor International’s New Product Innovation and Megatrends data and analysis to provide insights that can support these types of applications.

The US is the global leader in innovation

Our product innovation platform uses advanced machine learning technology to track new product launches online across 32 markets and 50 categories spanning food, beverages, health, beauty and home sectors. In the 3-year period from January 2021 to December 2023 we detected over 75,000 new brands and sub-brands for the first time online across the countries and categories covered. Nearly 12% of these new launches occurred in the US, demonstrating its prominence as a dynamic market and global leader in innovation. The US’s large and diverse population, substantial disposable income and consumer willingness to explore new products make it an attractive market for launching and testing new products. Success in the US can propel brands to global recognition, given its influential role in shaping consumer trends.Chart showing Leading Markets by Number of New Brand/Sub-brand Launches 2021-2023

Tailor innovation strategy to consumer trends such as wellness

Using our Megatrends data and analysis, businesses can identify and understand the consumer behaviour impacting product innovation. For example, the product innovation tracker shows a high level of new product launches in consumer health and personal care categories, especially vitamins and dietary supplements (VDS).

Over 13,000 new VDS brands and sub-brands were detected since 2021, accounting for 17% of all new launches

Source: Euromonitor International

This indicates that companies are responding to consumers’ increasing focus on health, aligning with our Wellness megatrend in which consumers are more health-conscious and seek more targeted and convenient health and nutrition solutions.

With this in mind, businesses can make a deeper assessment of the wellness trend, including using Euromonitor’s Megatrends quantification model to understand where consumer spending is increasing and the size of the opportunity. For example, in developed markets we can see the strongest growth in spending on wellness products to 2027 is forecast in Hong Kong, followed by a number of other markets such as South Korea, the UK and Denmark which also offer good opportunities for innovation investment aligned with wellness.Chart showing wellness megatrend growth

Track new product launches to learn how brands align innovation with important consumer trends

Armed with this data and insights on the location and types of innovation, businesses need to then monitor the competitive landscape to see who is innovating, understand their new product launches or modifications to existing portfolios, and assess their success or failure. This strategic insight enables businesses to fine-tune or refine their own innovation strategies and product portfolios, ensuring competitiveness, adaptability to market changes and alignment with evolving consumer needs.

Recognising the significance of the US market and the VDS category, companies can pinpoint the most prolific innovators and analyse the key features they prioritise in their new product development (NPD).Chart showing Leading Companies by Number of New Brand/Sub-brand Launches

Amid the challenging economic climate and consumers’ emphasis on cautious spending, most of the leading six companies in the US are introducing additional own label sub-brands. But important to note is their strategic alignment of new products with crucial consumer trends. Specifically, they are focusing on health claims, introducing new flavours, particularly those associated with wellness, and offering more convenient formats, catering to on-the-go and anytime consumption solutions.

Mastering consumer-centric innovation for growth

Across industries, consumer-focused businesses everywhere need to be able to make sense of what is changing, define future consumer needs, and identify both growth opportunities and where competitive threats are coming from, so that they can adapt their innovation efforts accordingly. Leveraging advanced machine learning to spot and track NPDs will empower companies to benchmark against competitors’ strategies, successes and failures to inform and shape their own innovation investment plan and determine which markets are the best for launching and testing new products. Megatrends analysis will enable businesses to identify the consumer trends most relevant to their categories for a strong indication of where opportunities lie. Then, using our Megatrends quantification model, which analyses consumers’ propensity to spend aligned to specific trends, businesses can see the growth potential of those opportunities and determine which are the most attractive areas for investment. This proactive, 2-step, insight-driven and consumer-centric approach to innovation will give companies the knowledge they need to make informed investment decisions in the right spaces for long-term success.

To learn more about Euromonitor’s Product Innovation capabilities, read our articles, Monitoring NPD for Successful Innovation, The Importance of Quantifying Megatrends: Unveiling Future Opportunities or Transform Your Innovation Strategy with Megatrends, or use our planning tool, Trend Analysis: A Formula to Guide Innovation.

To learn more about tracking new brand and sub-brand launches across the global digital shelf, visit our Innovation product page.

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