Across categories and brands, innovations are seen as a vital requirement to remain relevant, increase sales and gain new buyers. However, not all areas of the store show the same reliance on new products.
By analysing the top 10 brands in 70+ categories across 18 countries*, we found the average market share taken by innovations varies significantly by category. In fact, it ranges from less than one tenth of sales coming from young SKUs (less than 12 months) to more than one quarter!
Perhaps unsurprisingly, 6 out of the 10 most innovation-reliant categories are within personal care; including nappies and diapers and shampoo. The remainder of the top 10 comprises of two categories within household care (dishwashing and washing powder) and two within food (ice-cream and frozen fish).
On the other hand, categories where brands achieve less share from new products are often within food; for example, fruit juice, bean and ground coffee, milk or pasta. Whilst brands in these categories are no less active in launching new products, consumers appear to be more set in their choices and maybe less keen on variety.
Overall, although innovations are often necessary for all categories, it can be useful for manufacturers and retailers to know where they play a bigger role and to make decisions accordingly. Knowing how inclined consumers are to choose new products, and how intense competition for new products is should influence your new product strategy (how many, how new, how big).
*averaged over a three year period