Commoditization Death Spiral – Where and How to Focus Innovation
Nestlé CEO, Paul Bulcke is spot on in focusing their innovation efforts to drive growth. It is the only way to break out of the commoditization death spiral.
To further that point, it is equally important that companies focus their limited innovation resources in the right way. Traditional innovation is limiting as it’s primarily centered on segmenting consumers based on usage patterns and attitudes, and other measures such as need states. These traditional research methods are failed practices when trying to achieve bold innovation to break out of the product death spiral. And, depending on criteria, all of the above only net roughly a 5-20% success rate. The proof is undeniable - these approaches waste valuable corporate resources in chasing the wrong opportunities.
To break out of the commoditization death spiral and focus on the right opportunities requires a new approach to innovation, one that can get at the true concerns and wants of consumers. As researchers, we have the means to do exactly that. To do so, we need to leverage the voice of the consumer through listening techniques to drive future growth and bold innovation. But how?
Consumers are flooding social media networks with their stories. They’re voicing their concerns and wants as experienced in the past or hoped for in the future. Solutions like BehaviorLens™ Opportunity listens to the consumer voice, putting their stories into a quantitation that identifies whitespace (i.e. behavioral markets) to target. The identified “whitespace” or behavioral market is distinct from classical consumer markets defined through traditional consumer segmentation. Why? It has the ability to get at a specific moment within a consumers life. These moments are gold; they provide researchers with an understanding of where consumers are seeking newness or are most open to consider alternatives.
Having intel such as this when looking at where and how to focus innovation efforts and resources is the only way to break out of the commoditization death spiral to drive future success.