The drop-off in consumer spending and the uncertainty of the U.S. economy are sure to cause consumer product manufacturers to reconsider their plans to launch new products in 2009. But according to new research from Nielsen, the immediate reaction to abandon launches could be short-sighted and result in missed opportunities.
Nielsen recently mined insights from about 35 new item launches that are actively being monitored across a variety of packaged goods categories in the U.S. and found that product innovation remains important, but should be approached in a different way. For example, approximately three-quarters of the products being tracked showed little impact of the economic downturn. Nielsen found that consumer habits with respect to everyday goods are slow to change; their purchase intent and value perceptions remain stable over time, regardless of macroeconomic conditions.
Another surprising finding that goes against conventional thinking is that premium items are not dead. Over half of the items Nielsen is tracking are priced at a premium to their parent brand and/or respective category, and many of these are performing as expected. As consumers cut back their spending in areas such as new cars or vacations, they continue to treat themselves with “affordable indulgences.”
The complete report regarding product innovation in a recession can be read in the February 2009 edition of Nielsen Consumer Insight.