SA an 'innovation nation' when it comes to trying new products

The latest Nielsen Global Survey on new product innovation has found that consumers in South Africa have a distinctly 'new world' view and are far more inclined to try new products.
In fact, 51% of respondents in South Africa said they purchased a new product during their last grocery shopping trip. The study also found that nine of the eleven markets with the highest percentage of early adopters (based on new product purchase sentiment) are developing countries. South Africa recorded 28%, as compared with markets like Brazil (39%), Peru (30%) and Israel (30%).

Nielsen Africa Marketing & Communication Director, Ailsa Wingfield, comments: "Early adopters are an important segment for manufacturers for several reasons. They serve as product testers, providing feedback and suggestions for improvement and they're often opinion leaders, who can be powerful allies in spreading the word about new products.

"Developing countries like South Africa are therefore attractive markets for new product expansion efforts, due to their younger demographic composition, rising middle class population and strong appetite for affordable luxuries."

New products are not just for the young

Ailsa Wingfield, Nielsen Africa Marketing & Communication Director
Ailsa Wingfield, Nielsen Africa Marketing & Communication Director
While the youngest respondents were more likely to have purchased a new product during their last grocery shopping trip than their older counterparts, those categorised as 'early adopters' only show a slight age bias.

Wingfield points out that "early adopters aren't just younger consumers. Consumers of all ages are looking for products that make their lives better, and they can be passionate advocates if they find a product that fills a need. While Millennials are garnering a fair amount of recent time and attention, it's would be useful to consider casting the net wider, and not lose site of the needs across all age segments."

It's a shelf war out there

When it comes to launching new products, South Africa is no different from the rest of the world - brand competition is intense and shelves are crowded. The harsh reality is that the vast majority of new product introductions are taken out of distribution before the end of their launch year.

Within this scenario, South African consumers deviate from the global norm when it comes to discovering new products, with the number one tool being "saw it in-store" (59%), followed by "watching a TV ad" (56%) which indicates that there is still a reliance on more traditional methods. Word of mouth also has a role to play with 55% citing a reliance on friends and family to hear about new products.

"These findings show how critical the in-store environment is when launching a new product and the importance of in-store execution and strategic new locations for product distribution. There is a definite opportunity to build awareness as a means of stimulating demand, prior to consumers even getting to the store," comments Wingfield.

Booming social media and internet new product discovery

Earned media sources are growing in importance for new product information gathering, but reliance on traditional sources is still strong. Millennials and Generation Z respondents say they use several traditional advertising sources at comparable - or even greater - levels than older generations.

However, while the top list of sources combine a mix of paid, owned and earned media options, Internet-related platforms are three of the top nine sources cited for new product discovery in South Africa, with active Internet searches coming in at 47% and brand/manufacturer web at 18%. Reliance on social media showed the largest increase, rising 11 percentage points from 2012.

Social media usage for new product discovery is in fact particularly high in South Africa, with 31% of local respondents saying they utilise the medium for this purpose. This compared with Latin America at 31%, and 20% of European and 22% of North America respondents.

Reasons to believe

Lizette Kritzinger, Nielsen South Africa Innovation Director
Lizette Kritzinger, Nielsen South Africa Innovation Director
Looking at the new product attributes that resonate particularly strongly across all age groups South Africa mirrors global trends, with affordability cited by 38% of local respondents followed by recommendation (34%). "The fact that affordability remains key, shows that a value equation is imperative in South Africa for new product success, yet it is also the reason why most products fail," points out Nielsen South Africa Innovation Director Lizette Kritzinger.

She adds, "The reality is that consumers need to stretch their money as far as possible, and they're looking for products that stay within a budget. Savvy manufacturers are those who don't just sell their products at lower prices or on promotion, rather they build cost-cutting into the product development and design process. Cost-driven innovation requires letting go of traditional assumptions, and it starts with understanding what trade-offs consumers will make when they can't afford a product."

In terms of other factors spurring on the purchase of new products, four interesting themes emerged:
  1. Brand Recognition - Of the reasons behind the purchase of new products, 26% cited: "It is from a brand that I like", 19% said because it was from a well-known/popular brand, 14% because it was from a premium brand and 11% cited the fact that it was the best product in the category. Wingfield says that it's clear from these results: "If you have a strong, popular brand you are far more likely to succeed with a new product launch. A brand name can be one of the most valuable assets a company possesses. But brand building can be costly and time-consuming, so the ability to grow via line extensions can be extremely advantageous with 10% of respondents said their reason to buy a new product was: "It's from a brand with heritage (have known for a while)".

  2. Novelty - Aspects like "it's new" resonated strongly with South African respondents with 24% indicating it as a reason to purchase a new product with the same percentage indicating "it's better than similar products". In addition, "I saw it everywhere (in-store/advertising)" was cited by 15%.

  3. Convenience/Lifestyle - A number of questions related to the concept of convenience and the fulfillment of a direct need. These include 26% of respondents saying "it's convenient" and "it makes life easier". Steering more towards the lifestyle aspect, 21% said "it is suitable for the family" while 13% said "it improves my mood". "New products can strike a huge chord with consumers by fulfilling more intangible needs like the emotional wellbeing of the family structure. This stems from the fact that time pressures and stress are facts of life. Shoppers want products that help restore balance and free up time to do the things they value most," says Kritzinger. "There is also an overall, trend towards health and wellness which represents a 'healthy' business opportunity and one which producers would do well to tap into," adds Kritzinger.

  4. Social responsibility - Brands that are socially responsible and care about society also featured in the study, with 10% of respondents saying "it's from a brand that cares for the environment" and 7% "it is a brand that cares about society" as a reason to buy. While South African respondents increasingly value new brands with a social conscience, they don't currently believe there are enough products on the market which fulfill these attributes.


16 Jul 2015 10:03

<<Back





Comment
keith kunene
Great read. Can you advise how many respondents participated on this study and was there a provincial preference?
Posted on 20 Aug 2015 14:10
keith kunene
Great read. Can you advise how many respondents participated on this study and was there a provincial preference?
Posted on 20 Aug 2015 14:12
FOLLOW US
Latest News | About Nielsen | Contact Us | Website | Bizcommunity