In the world of CPG, brands have two options: innovate, or die.
Those of us in the industry know that innovation is a tricky game. It’s absolutely necessary to a brand’s survival. Yet every time you put a new product out to market – or renovate aspects like packaging or messaging – you are taking a risk.
Innovation is a process inherently fraught with risk. So what happens when the macroeconomic environment is introducing even more risk to your innovation process?
With looming tariffs, supply chain shifts, and all the potential downstream effects from inflation to unemployment rates, CPG brands have more to worry about than ever before.
Even so, innovation is the show that must go on. So how are today’s savviest brands proceeding?
In times like these, it’s tempting to withdraw. The uncertainty of our current macroenvironment has inspired timidity in some companies. They’ve battened down the hatches and are hoping to ride out the tariff storm by pausing all product development processes.
That’s not the common response we’re seeing, though.
If anything, the influx of uncertainty has inspired a rush on consumer testing. Afterall, in a world where so much can’t be known, the best defense is learning.
“Companies that are growing are cutting through the noise of a very crowded industry,” says Melanie Courtright, chief executive at The Insights Association. “[They] are innovating, specializing and transforming… They are strategically focused on creating new and increased value for their customers.”
When others in your category pull back, it’s the perfect time to push ahead. With many of your competitors choosing to forfeit, the field is more open than it’s ever been.
Are you ready to take advantage of this opportunity?
Brands ready to take advantage of the opportunity in front of them still need to proceed with precision–that’s exactly what consumer insights bring to the product development process in order to add clarity and mitigate risk.
Big ideas make all the difference, but real product innovation is 20% taking big swings, and 80% building confidence into your process. Here’s how you take a product to 100% with the right combination of inspiration and risk mitigation:
The question we keep hearing from Highlight users over and over is: “What are my consumers even thinking right now?”
In the best of times, brands already wonder about this. Consumer preferences evolve quickly. Thanks to the proliferation of influencer culture and platforms like TikTok, trend cycles are shrinking and turning over faster than ever before. Add economic uncertainty and regulatory updates to that equation and you have consumer audiences that may look very different from 12 or even six months ago.
Exploratory and digital testing is key to answering these first critical questions and giving you a base to start building on. You’ll need to know:
Tariffs might change supply change realities and impact what manufacturers it makes sense to work with.
Sending product concepts for prototyping is no small expense or effort, so you better be sure it will perform on shelf before investing in material development. In times of uncertainty, that means getting precise with concept testing first.
Concept testing can be used to evaluate anything from new products, services, features or branding elements to pricing strategies and even marketing campaigns. It’s a key step to reducing the risk that’s inherent to any product launch or change.
Did you know? Concept testing is not just for new products. If you’re considering a branding or packaging update, concept testing is a great way to infuse your renovation process with consumer data and move forward with confidence.
In short, concept testing is valuable throughout the product life cycle to:
Here’s something you might not have known about digital concept testing: it’s especially powerful when paired with the one-two punch of physical product testing.
Let’s imagine your R&D team has used customer data from concept testing to identify winning ideas. One key component of a proper digital concept testing should be asking your respondents: Would you pick this up on a shelf?
This (and questions like it) are designed to evaluate a key metric for any product developer: purchase intent.
Now let’s imagine your R&D team has proceeded with the winning idea(s) for your concept test and invested resources to build a prototype. This is when it’s time to put your idea to work. Use in-home usage testing to see if the real product experience effectively brings your concept to life and delivers against consumer expectations in the organic environments of their own homes.
In this phase, you’ll want to measure repurchase intent through survey questions like likelihood to recommend or repurchase. This combined data from digital and physical product testing is a leading indicator of overall product performance to provide a more comprehensive understanding of how your product will perform in market.
Recently, a leading beverage brand came to Highlight with a challenge: How do we reformulate to stay ahead of changing regulations and shifting consumer preferences without losing the taste our loyal consumers love?
This was a case that called for the one-two punch of digital testing followed by in-home usage testing.
The brand set out to:
In Phase 1, the Digital Category Assessor explored how consumers were feeling about specific ingredients. Their findings indicated they must remove additional artificial coloring due to negative consumer perception of dyes.
In Phase 2 the Physical Product Refresher sent a prototype to consumer homes. The results showed which reformulation was best optimized for color and ingredient acceptance across key consumer groups.
Macroeconomic conditions may change, but what remains true is: Product updates are inevitable, and innovation is the lifeblood of CPG brands.
With so much uncertainty, let consumer learning guide you to safer, informed product development decisions. With consumer data in hand, you have the North Star you need to build products they’ll love.