Nielsen cracks DNA of ‘breakthrough innovation’ success

Nielsen cracks DNA of ‘breakthrough innovation’ success, following study of 12,000 product launches across Europe

Thousands of new product launches fail in their first year, costing businesses millions of pounds, yet manufacturers can reverse these outcomes by changing their approach to innovation, according to a European study launched by Nielsen, which provides information and insights into what consumers watch and buy.

The Nielsen Breakthrough Innovation Report – based on an analysis of 12,000 FMCG product launches across western Europe since 2011 – shows that two-thirds of new products never even achieve a mere 10,000 unit sales, and three in four fail to retain a retailer listing beyond their first year.

But marketers can predictably and consistently overturn historical high failure rates to achieve 85pc success, by changing their approach to innovation and building a passionate culture around innovation.

“Through the study process, we found proof that innovation success is never just a remarkable coincidence. It’s about deliberate attempts to disrupt all aspects of the innovation process and challenge everyday norms, such as consumer attitudes, long-standing beliefs, launch mechanics, organisational behaviour and disciplines,” said Johan Sjöstrand, managing director of Nielsen’s innovation practice in Europe and co-author of the report.

The Nielsen study identifies four principles that are common to every breakthrough innovation success: choice, process, marketing and togetherness,

The absence of any one of these four components – no matter how good the other three – severely limits the possibility of breakthrough success,” noted Sjöstrand.

In the report, Nielsen also spotlights real life examples that have recently achieved breakthrough innovation success.

From the 12,000 product launches analysed, just seven met these testing criteria and are declared European Breakthrough Innovation Winners for 2014 by Nielsen: Foster’s Gold, Magnum Infinity, Milka Choco Supreme, Mullerlight Greek-style Yogurt, Lucozade Energy Pink Lemonade, Oral-B Pro-Expert All-Around Protection and Sodebo Salade et Compagnie.

In addition, three further launches are well on the way to becoming Breakthrough Innovation Winners next year: Lay’s Xtra, Cadbury Dairy Milk Marvellous Creations and Ariel 3-in-1 Pods.