|A consumer insight is a revelation of a significant gap between consumers’ aspirations and what they perceive as available, which can be turned into a business opportunity. For example, a consumer insight that led to the McWrap was a desire for a more portable “sandwich” at McDonald’s. Consumer insights, whether they are identified through elaborate market research techniques or simply by talking with customers (and non-customers), are all anchored in the act of communicating with consumers. Small chain and independent operators can leverage consumer insights often offered by their suppliers or ask customers directly. In the age of social media, it is easier to get ideas from customers of what they would like to see on the menu.|
Step 2 – Develop the innovation
The innovation must align with the consumer insight but must also be developed with financials in mind. What are the food and labour costs? What are the opportunity costs? Should this new item replace an existing menu item? How much complexity would this new menu item add to the back-of-house? When developing new products, do not waste resources testing ideas that will never be financially viable.
Step 3 – Test the innovation
Gather a group of customers willing to give an honest opinion and have them test the product. Operators with research budgets will often start by testing the concept using a survey and if the concept passes this hurdle, take it into in-market testing. This approach helps to better manage the costs of concept testing by removing weak concepts early from the innovation pipeline. For large operators the cost of carrying weak concepts throughout the pipeline is high, due to their more complicated supply chain systems and larger network of stores. Smaller operators actually have an advantage when testing the innovation in-store, as changes to the recipe can be more easily made and re-tested.
Step 4 – Launch
Even a strong concept can fail if it is not sufficiently promoted or if it is not executed well in-store. Small operators are more likely to leverage in-store cues (e.g. signage, servers telling customers about the product, handing out samples) to drive interest, but a healthy social media presence can also be used to generate awareness. In addition, back-of-house training must support the execution of the new product. Trial is nice but re-purchase is better.
Step 5 – Re-evaluate
Once a new product is launched, operators must review the performance of the new item. Is it building sales as expected? Are the profits it was forecasted to generate materializing? What changes need to be made to optimize it further? Large operators often establish performance benchmarks for their innovations. If a product does not meet or exceed these thresholds, the product may be pulled from market. Learning is most effectively done through a series of failures. Smaller operators should not be discouraged with failed innovations, but rather use them as learning opportunities to create products that will do well in-store.
Innovation is not just the introduction of new products. Innovation is a process that begins with a consumer insight, evolves through significant testing, and builds traffic and profit through marketing support and great in-store execution. For 2015, foodservice operators will need a fast-moving, consumer-centric innovation process to succeed.
About the author:
Andrew Hui is a Vice President at Ipsos Marketing and has helped his foodservice clients through consumer insights for almost 10 years. Currently, Andrew leads the new Ipsos Food Service Monitor, a syndicated, market study launched in 2014 that measures the foodservice industry in Canada. For more information, contact Andrew by email at email@example.com.