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Nielsen highlights future trends in product innovation

nielsen-profiles_0As we enter a new decade, brands, suppliers and retail industry experts are looking ahead to the innovation that will occur over the next 10 years.

“With constant evolution of channel, competitive and consumer environments, marketers are being forced to think differently in order to compete,” said Jenny Frazier, senior vice president of Nielsen BASES, the product innovation discipline within Nielsen. “Over the next decade, expect to see remarkable shifts in innovation strategies to accommodate a new age of conscious, connected and unconventional consumption.”

The next decade of product innovation will bring these trends, according to Nielsen:

Conventional product innovation is no longer about being first to market — Innovation now extends to identifying a brand’s larger purpose, for connecting with more discerning and fickle consumers. There is no single path to innovation success, and successful innovation can come in many forms: some could be disruptive game changers, some could be launched to fend off competitive pressure and some might be launched with the idea of tapping into an emerging consumer trend.

Brands will innovate in a heightened world of product disloyalty — Today’s consumers are alternatively bombarded and empowered by choice. They are also more disloyal than ever before, with one third of U.S. consumers claiming to be less loyal to products today than they were five years ago, and nearly half indicating they are actively looking for new products. This serves as a challenge for legacy brands and products, but it can be resolved by bold innovation.

Product packaging as we know it will be reimagined by 2030 — This could include refillable, dissolvable, plantable, food waste-based or other kinds of packaging. As consumers continue to prioritize sustainability, companies will remake the materials used to create their packaging, but also leverage packaging as a vehicle to reinforce authenticity. For some, product packaging will stand as a brand’s badge of commitment toward a more sustainable way of living.

Convenience with a conscience will emerge — The rise of the on-the-go lifestyle has prompted a surge in innovation within prepackaged, single-serve food offerings. More innovation is likely to occur in this sector, particularly within the fresh, refrigerated spaces, such as locally sourced hard boiled eggs for snacking. Additionally, this trend is rising parallel to the backlash against single-use plastic and a movement toward increased sustainability. Innovation will need to push convenience driven items like single serve offerings, from product formulations to packaging, to be more sustainable.

Generational preferences are breaking from tradition, marking an opportunity for innovators to rethink product norms — Interesting shifts are occurring at the opposite ends of the generational spectrum. Baby Boomers are changing the script by keeping youthful interests, staying active and taking on aging like no other generation has done before, while Generation Alpha is being raised with more mature, sophisticated tastes — at least according to foods, Nielsen found. Over the next decade products geared toward older generations will be more youthful and products aimed at the youngest generation will seem more mature.

Innovating for social commerce will rise — The era of creating photogenic products for Instagram and other social sites will continue, but the rise of social commerce will push the envelope for product innovators even further. Companies will have an increased opportunity to create limited edition, exclusive offerings specific for social commerce over the next decade. This will create new ways to engage with customers, enabling even more personalized products for targeted consumers and social communities.

Global textures and flavors will continue to inspire — Multicultural influences will guide the next decade of innovation as consumers continue to look for culinary experiences. Innovation in textures is prime for expansion, as seen with the mainstream popularity of food textures like mochi ice cream and boba drinks. Additionally, new global flavor innovations will continue to emerge, reaching new depths of spicy, savory and sour. Innovators will tap into more global tastes and trends for inspiration over the next decade, meeting the growing consumer need for experiential foods.

An increase in inclusive innovations will emerge — Product innovators will rise to the challenge to create products that are more inclusive, catering to consumers and communities across gender lines, abilities and ages. Additionally, brands will return to a more binary state, with less concentration on marketing unnecessary, genderized, household products and an increased focus on efficacy and authenticity.

Memorable mash-ups — Brand mash-ups will continue to draw attention, with some playing into the enduring appeal of nostalgia.

Products will test the boundaries of staple substitutions — Innovation in plant-based proteins has upended the protein space. As consumers continue to show interest in sustainable substitutes, companies will respond by continuing to innovate in this space, expanding to new categories across the store.

Originally published at Convenience Store News. 


Convenience retailers must tap innovations to meet consumers’ ‘sky-high’ expectations

Retail technology is becoming a bigger priority than ever before, as evidenced by the record number of attendees at the 2019 Conexxus Annual Conference in Nashville earlier this month. The 200-plus convenience store industry members at this year’s event have a full plate when it comes to innovation.

Kwik Chek Food Stores is just one of them. Kevin Smartt, CEO of the Texas-based chain and chairman of the Conexxus board of directors, told conference attendees that his company’s innovation pipeline is full and runs the gamut from loyalty programs, to mobile app food ordering, to the testing of self-checkout and mobile checkout, to deep data and consumer analytics, to blockchain.

Regardless of what is on the “to-do” list, though, it all comes down to putting systems in place that are critical to the c-store consumer, Smartt explained during the event’s opening session.

“We sell a lot of stuff, but we really need to understand our consumer,” he said. “Then, we need to understand what our consumer wants.”

THE FUTURE LANDSCAPE

The future landscape of retail and technology’s role in it is “simple” and boils down to a few key themes, according to Gray Taylor, executive director of Conexxus. These themes are:

  • Technology will continue to empower fickle consumers.
  • Every business is in the convenience business, and the definition of “frictionless” changes daily.
  • Every business will be in the data business.
  • Traditional scale is dead weight; new scale comes from the technology and logistics pool.
  • IR4 technology, or the fourth industrial revolution, will eradicate distance, location and immediacy as “moats.”

“The digital consumer has sky-high expectations when it comes to convenience,” Taylor said. “We have to ensure a convenient and frictionless shopping experience. Accessibility and relevance is no longer about physical location, but also about digital presence.”

EVOLUTION OF RETAIL TECHNOLOGY

The convenience store industry has seen its technology move beyond the basic forecourt to the store-to-the back office model. With innovation, the industry “is moving the store out into the customers’ hands” with initiatives like loyalty programs and mobile payments, Taylor explained.

The next generation, he believes, will include more cloud-based security, self-checkout, digital customer-related management and artificial intelligence (AI) checkout. This new wave is expected to come within the next five years, he said.

Looking three to seven years out, the industry will see advanced analytics, IoT (Internet of Things) food safety, vendor data exchange and home delivery. And if Taylor had to pick just one technology to keep an eye on, he said it would be autonomous delivery vehicles.

MOVING FORWARD

As more work needs to be done in the convenience store industry, the Conexxus chief advised retailers to keep some questions in mind:

  1. Are you prepared to defend your turf and expand into new turf?
  2. Are you driving efficiency in the supply chain?
  3. Is your technology stack encouraging innovation?
  4. Do you have a data-driven culture?
  5. Do you have your eyes fixed on the horizon?

“Retailers need to be leaders,” he said. “You cannot look to your vendors to tell you what your customers want.”

Originally published at Convenience Store News. 


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