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Consumer Digest: New Product Innovation October 2023

Welcome to the October edition of the Consumer Digest, where we aim to provide relevant informative and actionable insights around consumer trends. This month, we are focusing on new product innovation. We’ll look at shoppers’ preferences for new products across categories and functional benefits. From there, we’ll examine how they are discovering new items and their willingness to put those new items in their cart. We’ll also look at consumers’ view on expandable consumption. Finally, we'll wrap with how inflation may affect the upcoming holiday season. 

Financial Fright! Are shoppers spooked over their spending?

Shopper’s comfort over their finances shifted slightly this month with 25% reporting feeling uncomfortable (B2B) with their finances vs. 22% last month.

Gen Z and Millennials (25yrs – 34yrs) are significantly more uncomfortable with their finances when compared to Boomers (65yrs – 74yrs).

Product innovation – Shoppers seek innovation across many categories with some differences by age cohort

While Covid created a strong focus on-shelf and in-stock fundamentals, supply chains have largely recovered which has enabled more opportunities for innovation in the CPG space. New preferences across categories and product attributes are starting to emerge.

  • Shelf-stable grocery, fresh bakery, and frozen food lead as categories where shoppers would most like to see new products available

  • Shoppers are seeking innovation to provide functional benefits, clean ingredients and higher protein options

Given financial pressures, shoppers remain mindful of the price they are paying even when making decisions on trying new products

Percent of shoppers who are extremely concerned (T2B) about these attributes when trying new products:

  • 77%: Price

  • 71%: Flavor

  • 62%: In-store availability

  • 61%: On sale

  • 55% Coupon availability

Product innovation – New item discovery and purchase decisions

Shoppers discover new items in a myriad of ways and report a higher likelihood to purchase new products when they receive a discount or coupon to drive savings.

The most frequent ways that shoppers report discovering new items to try is through in-store display, product advertisements and product coupons

  • 47%: In-store display

  • 45%: Product advertisements

  • 42%: Product coupons

  • 41%: On sale/promotion

  • 41%: In-store signage

  • 33%: Recommended by someone

  • 23%: Product samples

  • 22%: Social media

  • 20%: Retailer website

Shoppers are more likely to try new products if there is a price reduction or they have a coupon available

  • 70%: Product price reduction

  • 68%: Coupon for the new product

  • 33%: Product on display in-store

  • 32%: Advertisement with product benefits

  • 28%: Recipe for the new product

  • 13%: Used by celebrity/influencer

Shoppers were about equally divided in where they would like to find new items in-store

  • 34%: In section for new items only

  • 36%: In standard category section

  • 31%: In standard category section with “New” item callout

Products that rank high in expandable consumption, like snacks/candy and drinks are ripe for consumer experimentation with purchase decisions often made at the time of purchase, and even in addition to planned purchase.

When is the purchase decision made for new products? What categories are purchased incrementally?

Plan to purchase new item ahead of time

  • 73%: Dairy

  • 67%: Baby care

  • 64%: Personal care

  • 61%: Paper products & health care

Often buy new item instead of planned item

  • 46%: Fresh Bakery

  • 39%: Snacks/Candy

  • 38%: Cereal

  • 38%: Household cleaning

Often buy new item in addition to planned item

  • 19%: Snacks/Candy

  • 19%: Frozen Food

  • 16%: Produce

  • 14%: Drinks

Willingness to try new products from national brands vs. private label

  • 43%: Extremely likely (T2B) to purchase from a national brand they already use

  • 36%: Extremely likely (T2B) to purchase from a private label brand they already use

Willingness to try new products from brick-and-mortar vs. online

  • 37%: Extremely likely (T2B) to purchase from a brick-and-mortar retailer where they currently shop

  • 31%: Extremely likely (T2B) to purchase from an online retailer where they currently shop

Perceptions of expandable consumption

Shoppers have an awareness of some expandable consumption habits, citing the ability to quickly and easily use as their primary reason for using more, followed by always having the product stocked in their home, or using out of habit

Which of the following categories do you often find you’re using more of when you have those product(s) in your home?

  • 48%: Snacks/Candy

  • 40%: Drinks (soft drinks, juices, etc.)

  • 38%: Paper Products (toilet paper, tissues, paper towels, etc.)

  • 32%: Cereal

  • 31%: Produce

  • 31%: Dairy (milk, cheese, etc.)

  • 29%: Frozen Food

For what reasons, if any, do you find you use more of a product when you have them in your home?

  • 49%: I use more of a product because it’s quick and easy to use

  • 36%: I use more of a product because I always have the product stocked in home

  • 32%: I use more of a product out of habit

  • 27%: I use more of a product because I’m afraid the product will go bad/expire quickly

  • 23%: I use more of a product because it is hard for me to control how much I use the product

  • 19%: I use more of a product because I always buy the larger/bigger/value size

How shoppers are preparing for the upcoming holiday season

When do you plan to start your holiday gift shopping this year?

  • 30%: In the next month

  • 28%: I have already started

  • 19%: In the next few weeks

  • 15%: I do not plan to do any holiday gift shopping this year

  • 5%: Within a week of the holiday

  • 3%: Within a few days of the holiday

What activities do you plan to do this upcoming holiday season?

  • 52%: Listen to holiday music

  • 52%: Decorate your home with holiday decorations

  • 47%: Use family recipes for cooking/baking

  • 41%: Use streaming services to watch holiday movies

  • 36%: Host a gathering at your home for friends/family

  • 20%: Donate to a charity

Take-out over Turkey? How shoppers’ Thanksgiving meal plans might differ from last year

What types of Thanksgiving meals shoppers plan on having this year compared to a year ago:

  • Traditional Thanksgiving Meal, Cooked At Your Home (47% compared to 51% last year)

  • Traditional Thanksgiving Meal, Cooked At Someone Else’s Home (22% compared to 34% last year)

  • Traditional Thanksgiving Meal Purchased Already, Prepared At Your Home (9% compared to 10% last year)

  • Traditional Thanksgiving Meal Purchased Already, Prepared At Someone Else’s Home (8% compared to 9% last year)

  • Heavy Appetizers Instead of a Full-scale Meal, At Your Home (5% compared to 5% last year)

  • Heavy Appetizers Instead of a Full-scale Meal, At Someone Else’s Home (3% compared to 5% last year)

  • Eating Out at a Restaurant (6% compared to 4% last year)

Inflation is putting a damper on holiday celebrations – especially for lower income and older adults. Trends in responses by Income and Age indicate that certain groups of shoppers, primarily those making less than $50k and those ages 55 years or older, are less likely to celebrate and shop this holiday season.

Want to dig deeper?

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SOURCE: 84.51° Real Time Insights, October 2023

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