Consumers in developing markets are most inclined to try new products, according to a Nielsen Global Survey on new product innovation. More than half of respondents in Asia-Pacific (69 per cent), Africa/Middle East (57 per cent) and Latin America (56 per cent) say they purchased a new product during their last grocery shopping trip, compared with 44 per cent of European and 31 per cent of North American respondents.
The study found that nine of the 11 markets with the highest percentage of early adopters (based on new product purchase sentiment) are developing countries: Brazil (39 per cent), Peru (30 per cent), Israel (30 per cent), Colombia (28 per cent), India (28 per cent), Latvia (28 per cent), South Africa (28 per cent), Bulgaria (27 per cent), Serbia (27 per cent), Croatia (26 per cent) and Romania (26 per cent).
“Developing countries can be attractive markets for new product expansion efforts due to their younger demographic composition, rising middle class population and strong appetite for ‘affordable luxuries,’” says Rob Wengel, senior vice president and managing director of Nielsen Innovation in the US. “But developing-market consumer needs, standards and expectations can vary dramatically from those in more mature markets, and finding the right mix takes a market-by-market approach.”
Brand Competition Is Intense Globally
Brand competition is intense and shelves are crowded. The vast majority of new product introductions are taken out of distribution before the end of their launch year. “New product failure rates are extremely high, but success is no fluke,” said Johan Sjöstrand, senior vice president and managing director of Nielsen Innovation in Europe. “Success is not simply the result of luck or even genius. Rather, successful product launches are the culmination of organizational focus and commitment to product development, creative marketing, smart leadership and, above all else, an in-depth understanding of what drives consumer preferences.”
How Do Consumers Discover New Products?
The most commonly used source to learn about new products is reliance on friends and family, cited by 56 per cent of global respondents, followed by viewing TV ads (52 per cent), seeing it in a store (48 per cent) and using active Internet search (44 per cent). In fact, Internet-related platforms are four of the top nine sources cited for new product discovery: social media postings (26 per cent), Internet ads (26per cent), and brand/manufacturer web pages (25 per cent) are the other three sources. Receiving a free sample (31 per cent) and newspaper/magazines (27 per cent) are the other top sources cited.
While the top list of sources combine a mix of paid, owned and earned media options, reliance on social media showed the largest increase, rising 11 percentage points from 2012. Social media usage for new product discovery is particularly high in Africa/Middle East (34 per cent) and Latin America (31 per cent), compared to 20 per cent of European and 22 per cent of North America respondents.
Globally, a few new product attributes resonate particularly strong across all age groups. Affordability (23 per cent), convenience (22 per cent), brand recognition (21 per cent) and novelty (20 per cent) were top reasons for purchase. When it comes to the types of products consumers wish were on the market but are not readily available, affordability (43 per cent) and convenience (27 per cent) again top the list, followed by health and wellness (28 per cent) and environment friendly (26 per cent) attributes.
Generationally, there are some interesting differences to note. Roughly half of Baby Boomer (ages 50-64) and Silent Generation (ages 65+) respondents say they wish more products were available at affordable prices, compared with 43 per cent of Generation Z (ages 15-20), 40 per cent of Millennial (ages 21-34) and 42 per cent of Generation X (ages 35-49) respondents.
Conversely, a greater percentage of Generation Z (23 per cent) and Millennial (21 per cent) respondents wish more premium items were available on the market than Generation X (16 per cent), Baby Boomer (14 per cent) and Silent Generation (7 per cent) respondents.