Innovation is a key retail strategy for attracting and retaining discerning consumers. In the highly competitive retail industry, creating new and exciting products and trends is essential for staying ahead of rival stores and brands.
However, while retail innovation is vitally important, research has shown that more than two-thirds (86 per cent) of new products fail within two years. In comparison, just 25 per cent of innovations continue to thrive past their second year of sales, according to global retail research consultancy TNS.
Understanding why innovation fails is a crucial step towards ensuring your business can create the products and services that encourage growth and long-term success.
Innovations are “zombies or cannibals”
In a vast number of failed attempts at innovation, stores have simply rebranded existing products, or created merchandise that causes customers to change habits, rather than attracting new consumers.
In a survey conducted last year, TNS revealed that approximately 60 per cent of consumer good launches were either “zombie or cannibal” products. This means they released merchandise that is old ideas rehashed or replaces the need for existing goods.
“Too many businesses are spending huge amounts of money on quasi innovation that only convinces existing customers to swap within their range,” TNS Global Head of Innovation and Product Development Steve Landis explained.
“The key to unlocking true growth is to focus on genuine innovations that will draw in brand new customers or lead to greater frequency of use by existing customers.”
Mr Landis believes that genuine innovation can “rejuvenate a company’s fortunes and put it into a league of its own”.
It is therefore important to ensure that your innovative new products fill a previously unaddressed need in your business, encouraging consumer growth rather than a change in customer habits.
A lack of audience
Generally, new products are released to meet the changing needs and demands of a company’s audience. Genuine innovation requires retailers to preempt these demands, giving consumers what they want before they know they need it.
Unfortunately, this can often lead to businesses releasing products that have no current market. A launch at the wrong time, or a poorly researched product, can mean the present disinterest continues long term, leading to the inevitable failure of the merchandise.
Retailers can avoid this issue by ensuring they understand their customers, conducting research to accurately forecast demand. If your business has been struggling with innovation, you can talk to a retail consultant for more information, advice and guidance.