Findings:
Marketers' category definitions are outdated: Over 50% of categories don't reflect how consumers shop, ignoring their desires for specific attributes and benefits.
Successful new products align with consumer needs: Circana's 2023 New Product Pacesetters demonstrate how brands found success by catering to evolving consumer needs, even crossing traditional category boundaries.
Consumers prioritize need fulfillment over category: Consumers don't adhere to strict categories when seeking solutions for specific needs, such as nutrition, convenience, or unique experiences.
Purchase-based data reveals opportunities: Observing purchase patterns and attributes can expose consumer motivations and unmet needs, leading to innovation.
Key Takeaway:
Marketers need to shift from outdated category definitions to a consumer-centric approach that prioritizes understanding and fulfilling evolving needs.
Trend:
Consumers are increasingly driving the definition of product categories based on their needs, rather than conforming to traditional industry classifications.
Conclusions:
Marketers must adapt to the consumer-driven landscape to remain relevant and capture growth opportunities.
Purchase-based data and predictive analytics offer valuable insights into consumer behavior and unmet needs.
Innovation should focus on solving specific consumer needs with relevant attributes and benefits, even if it means crossing traditional category lines.
Implications for Brands:
Re-evaluate category definitions: Review current market structures and identify gaps between consumer needs and existing categories.
Embrace purchase-based data: Utilize purchase data and predictive analytics to understand consumer behavior and uncover hidden opportunities.
Prioritize consumer needs: Develop products and marketing strategies that address specific consumer needs, even if it means venturing into new or unconventional categories.
Innovate beyond boundaries: Don't be constrained by traditional category definitions; explore new product concepts and combinations that fulfill emerging needs.
Target effectively: Use purchase-based data to identify and target specific consumer segments with tailored offerings.
By adopting a consumer-centric approach and leveraging data-driven insights, brands can unlock new growth opportunities, drive innovation, and stay ahead of the curve in the ever-evolving CPG landscape.
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