In it for the Long Run: True Innovation is Sustainable

In it for the Long Run: True Innovation is Sustainable

By Vicki Gardner, SVP, Product Innovation, Nielsen

As Nielsen reviewed the vast information about new product launches in the CPG space, we saw an opportunity to expand the view. We analyzed 11,000+ products launched between 2008 and 2010. We stood these launches up against our criteria for breakthrough innovations and came out with 34 clear winners. One key element in our model was examining endurance. We wanted to ensure that winning initiatives achieved at least 90% of year one sales in year two. I think we can all agree that when a product launches with high sales, but then fails to continue that pace, the success is short-lived, and probably not one you want to replicate.

There are two activation models that we’ve identified when looking at how to sustain momentum in the marketplace for breakthrough performance: marathoner and sprinters. Marathoners launch at a slower pace and build off their momentum, picking up speed as time goes on. Sprinters launch with substantial support and come out fast, rarely slowing down. More often, larger companies use this model when they are launching line extensions or a product that is relatively lower risk. These products carry a meaningful price premium, on average 1.9x the category average. But the marathoner approach is certainly capturing its share of the consumer wallets as well. These products are priced at 35 percent premium on average versus competitors in their categories. Smaller companies or brands launching products in a new category were more likely to follow this model.

Celebrating breakthrough innovations means taking a deeper dive into how they were developed, what consumer demand they are meeting, how companies are successfully creating a distinct concept, and how companies learned both before and during launch. In a session during Nielsen’s Consumer 360, we heard from Roberto Cymrot, Knowledge & Insights Director, glacéau-Coke, who shared insights from Coke and vitaminwater zero, which was our only 2010 Platinum Breakthrough Innovation winner. You’re not going to get every innovation right, but learning from your experience as well as others will certainly improve the odds of breakthrough innovation.

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