Innovation report: Global survey on impact of market knowledge
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Nearly 90% of product & innovation managers say that better access to consumer insights would increase their product launch success rates.
Innovation and marketing teams agree that consumer and market insights are an essential ingredient for successful new product launches. But just how much value do they add? And how big is the prize if market insights can be fully utilized?
This article explores the innovation opportunities identified in Market Logic and Insight Platforms’ recent survey of innovation and marketing teams.
Better use of consumer insights can improve commercial performance
In large companies today, only 55% of product and innovation decisions are informed by market insights or consumer data. That suggests that nearly half of all product decisions are made based on gut feeling, historical precedent, or the highest-paid person’s opinion.
However, with better access to market insights, the share of product decisions informed by data should be 74% – nearly a 20-point gap compared with today.
There is a clear appetite amongst product and innovation teams to use more of every source of consumer insights and data.
If this latent demand for insights in product / innovation teams can be met, the share of data-driven decisions will grow significantly.
Improved product launch success: a multi-billion dollar opportunity for CPG
The Consumer Packaged Goods (CPG) industry is an innovation powerhouse, launching 30,000 new products annually in the US alone, generating approximately $150 billion in year-one sales.
But the picture could be much healthier. Only 30% of new products sustain or grow sales in year two; fewer than 3% generate annual revenue of more than $50 million; and the share of true innovations – as opposed to brand extensions – is in marked decline.
In our research, nine of out ten product / innovation teams agreed that easier, faster access to consumer insights and data would increase product launch success rates.
Some modest assumptions of the impact of better insights show how valuable this could be:
Year one sales: increasing from 3% to 4% the share of new products generating sales of $50m+ could add $15bn – $20bn in incremental revenue.
Year two sales: increasing the share of new products sustaining or growing sales in year 2 from 30% to 35% could add nearly $10bn in new value.
AI can help to hyperscale consumer insights for product & innovation teams
It’s clear that AI can play a strong role in helping product teams to make more data-driven decisions. Today, nearly 50% use an AI Assistant to access market insights and consumer data.
This is significantly higher than in marketing and brand teams:
In large consumer businesses, the use of AI Assistants is strongly associated with more frequent use of consumer insights and data. Across every type of data, those who frequently use an AI Assistant are significantly more frequent users of consumer insights and data:
These differences can further be seen in the attitudes of these teams toward the impact of AI for the market insights and data industry. Universally, product / innovation teams are more enthusiastic about AI’s potential to give more direct access to insights, reduce costs, increase use of insights, synthesize data reliably, and integrate it into other business decisions.
Using AI assistants for market insights helps drive efficiency and reduce complexity
Overall, AI Assistants have strong potential to drive greater use of insights and data in product and marketing teams when they are connected to a centralized repository of insights and data.
They make interactions much easier through conversational interfaces – reducing the challenge of skill deficiency, which is apparent in product / innovation teams.
They are quick to provide answers: speed-to-data is one of the greatest barriers in the currently fragmented insights landscape.
And AI Assistants are effective at synthesizing complexity: a strong desire exists amongst marketing and product teams for analytics tools that can help surface answers automatically.
For leaders, the opportunity is clear: increasing levels of trust and enthusiasm for AI will drive adoption of tools that can reduce bottlenecks, increase velocity and drive up the share of decisions that are powered by consumer insights.
Read our recently published report, created with Insight Platforms, on hyperscaling insights for the full survey results — and learn how your organization can use AI for market insights to drive efficiency and reduce complexity.
Start generating and capitalizing on insights using AI. Learn more about how Market Logic can help you become an insights-driven enterprise. Contact us or email info@marketlogicsoftware.com to book a free consultation with a member of our team.
