On average, new product releases in CPG fail 9 times out of 10! This high failure rate of innovation leads to an immense amount of wastage – a highly unsustainable process.
Why Does this Happen?
The overarching issue in product innovation currently, is a lack of the right data behind decisions.
Without robust data to make empirical decisions, weak product concepts continue to be developed, without the ability to filter them out.
This all leads to immense wastage – whether that’s in time, finances, or physical resources that cost the earth.
What Data are we Referring to?
Simply put, consumer data. The data from those that will actually purchase, or not purchase, these products, and ultimately decide whether a product will succeed or not once it hits the shelves.
Yet, surprisingly, current innovation processes in Consumer Goods use very little consumer data to make important product decisions.
What does end up happening is decisions are made using gut feel, subjective opinions, or small focus groups that don’t always thoroughly represent the population or lend reliable insight.
Developing products without strong and relevant data, from consumers that companies hope will purchase them, doesn’t make logical sense, and more importantly leads to huge wastage.
Wastage from a Lack of Data
In such product development processes, wastage occurs due to a variety of reasons:
- Multiple meetings on individual product elements are carried out, within which there are disputes and stalemates = time is lost
- Too many individuals are required to sign off the various points of the process, watering down the proposition – instead of launching one bold product, 4 watered-down ones are launched as this move is deemed less risky = more material is used for less gain
- There are no clear hypotheses on individual products that can be used as the foundation from which to test them for suitability. Along with this, no obvious testing tool is used consistently by innovators throughout an innovation process = resources are not allocated efficiently
Without a testing tool and hypothesis, teams act less like scientists empirically moving through a process, and more like gamblers hoping for a big win.
But as long as one product eventually does perform, what’s the issue?
Innovation should not be a trial and error exercise after everything has been physically developed!
An Agile Process is the Solution
Agile Innovation, combined with leading research tools such as Vypr, allow you to test and iterate product concepts and ideas with consumers digitally, before they are brought to life physically, reducing material waste, shipping waste, financial waste – the list goes on.
Agile relies on high frequency, iterative improvement, encouraging flexibility and quick responses to validated feedback, so companies can validate and optimise ideas before they become a potentially expensive reality.
Waste in Innovation Can be Avoided By:
- Companies developing a clear idea of who the consumer is and what their pain points are, to develop products they actually want and need
- Empowered teams who aren’t forced to check in with senior managers too frequently during a process, saving time and allowing for bolder, more successful innovation
- Available, easy-to-use and robust testing tools to conduct experiments to stress test the hypotheses as early as possible in the innovation cycle
- Predictive data sources that enable innovators to kill things quickly, reducing product failure, and so wasted resources
- A broader cross-functional team who are onboard with the idea of using predictive data to drive decisions, in an Agile way
Want to learn more about how an Agile approach can empower you to reduce waste and create better products, faster? Watch recordings from the Agile Innovation Summit here
At the summit we heard about how industry experts from companies such as GSK and Ella’s Kitchen are embracing Agile principles to transform their product development.