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. Moreover, Millennials shop differently than any demographic group that came before them. Specifically:
More than half of Millennials prefer to shop online.
They increasingly buy groceries through a smartphone app.
Nearly two-thirds of them favor generic brands.
They display 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 Walmart. 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 quickly 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 development stage. Supply chain integrity, ingredient identification, specification design, and R&D acceleration require seamless collaboration between suppliers and buyers.
One of the biggest mistakes companies make is pausing new product development, especially during a challenging economic environment. A wait-and-see approach leads to a static product portfolio that can’t hope to outperform a competitor’s proactive strategy. Because your competitors are moving ahead, pulling back on NPD isn’t a viable solution.
With the launch of Formula Management, the TraceGains Networked Product Development Suite is now complete. The combined solution allows teams to go from manual processes to automated results by digitizing and streamlining new product development for better, faster innovation. Networked means companies no longer have to chase down suppliers for documentation because it’s already available.
Join us for a webinar on March 25, where TraceGains CEO Gary Nowacki and Sales Engineer Ruben Galbraith share how Networked Product Development drives collaboration, innovation, and faster time to market. Register for this complimentary webinar here.