Magazine: Consumer perception of innovations

By: Tisza Andrea Date: 2020. 02. 11. 07:15

Ágnes Szűcs-Villányi
managing director

In the 2nd quarter of 2019 nominal value sales were up 7.7 percent from the level of the 1st quarter. The market share of discount supermarkets reached 28 percent – in comparison with the July 2017-June 2018 period their value sales augmented by 14 percent. Last year more than 70,000 new FMCG products appeared on store shelves. However, a large proportion of newly launched products don’t survive their second year in the market. Three quarters of the innovations that aren’t recommended by Nielsen’s product launch expert division BASES won’t be successful.

Still, new innovations play a key role in the FMCG sector, having realised a 9-percent value sales growth in the food and a 20-percent growth in the drug segment in 2018. According to Nielsen’s Shopper Trends survey, 20 percent of Hungarian consumers are open to trying new innovations. Nearly 70 percent of Hungarian consumers try new innovations from time to time, but basically they stick with the products that they are used to buying. The biggest motivation for trying a new product is if it is recommended by someone they know or if the shoppers notice it in the store. This means that packaging and in-store displaying are very important.

What do shoppers consider to be an innovation? They can percept premiumisation as an innovation, the same is true for a new packaging design or sub-brand; at the same time they don’t necessarily think a new flavour is an innovation. Shoppers want new innovations to be convenient, practical, eco-friendly and healthy. As a conclusion, we can say that new innovations must be well-planned. It is key for companies to think in terms of portfolio, focusing on the level replaceability being low. It is best if innovations are tested (in cooperation with retailers), if the target group is understood and if the new product is positioned well. //