Millennials are now the driving influence in today’s marketplace since Baby Boomers started leaving the workforce in droves.
According to Information Resources Inc., a market research firm, millennials account for a third of overall CPG sales. Millennials shop differently than any demographic group that came before them. Specifically:
More than half of millennials prefer to shop online.
They increasingly purchase groceries through a smartphone app.
Nearly two-thirds of them favor generic brands.
They exhibit higher levels of brand loyalty.
More than 40% of them want to help companies develop new products.
Companies Still Playing Catch Up
The demand is apparent. But meeting it is something else altogether. Despite the growing desire for new products, only 36% of CPG companies claim to “have an effective, holistic approach to new product development and introduction (from innovation through end-of-life),” according to research from the Grocery Manufacturers Association. Worse yet, only a quarter of the companies surveyed felt their employees understood their NPD processes.
Where do new ideas for products come from? Surprisingly, companies are increasingly open to hearing from external business partners and even consumers themselves.
“The majority of companies report that 30% or less of new product ideas come from outside of the company; however, high performing companies expect 40% to 50% of new products to come from outside their company,” the report found. “Indeed, one of the most successful product launches of the last two years, Clorox’s GreenWorks household cleaning items, was developed with input from retailing partners Safeway and Wal-Mart. Similarly, Kettle Foods Inc. engaged consumers in online voting to determine which chip flavors the manufacturer should produce and made it easy to buy the new products online.”
Finally, the study also revealed that while most CPG companies use a wide range of consumer and shopper data in the NPD process, few can easily glean actionable insights from that data, so it is often not shared across departments.
What Can You Do?
Nearly a quarter of companies reveal product launches fail because they were late to market. Getting new products in front of consumers before your competitors requires speed and efficiency at every stage of development. Supply chain integrity, ingredient identification, specification design, and R&D acceleration require seamless collaboration between suppliers and buyers.
TraceGains can help break down information silos—both external and internal—by replacing them with a collaborative platform that connects teams, simplifies workflows, and standardizes digital documentation to allow businesses to scale without adding resources.
With a single location for all supply chain information and documentation, teams can bring new products to market faster. R&D can research suppliers and ingredients rapidly. The regulatory department can address claims, label issues, or any other compliance requirements at the front end, reducing downstream delays. Quality can pre-approve ingredients and suppliers and manage the process through approval. Meanwhile, procurement can negotiate price and shipping with suppliers and even recommend alternatives. Lastly, suppliers can ensure compliant ingredients seamlessly enter the supply chain with all the necessary paperwork.
The fragmentation of consumer preferences and the ability to produce and access products to meet these preferences increases the complexity of new product development. Learn how you can accelerate each stage of product development with TraceGains.