New products can revitalize brands amid high inflation

From Shopper Marketing Report: BrandSpark also finds shoppers are waiting for sales, which are not coming from marketers.

New products are driving interest in brands, despite the challenges of a high inflation environment.

BrandSpark’s Canadian Advertisers and Marketers Survey of 129 leading marketers (conducted jointly with the Association of Canadian Marketers) reveals that 72% of marketers introduced new products or services this year, including about 90% of CPG marketers.

It’s a “revitalization force” for a lot of brands, says Philip Scrutton, VP, shopper insights, BrandSpark International. Scrutton says occasionally products were also reformulated, or were developed with better margins, which is also paying dividends.

Canadians may be cutting out certain types of products and reducing consumption, as 77% of respondents in the company’s separate Canadian Shopper Study of approximately 9,500 respondents say prices increased for “most of the products that they buy.” However, counterintuitively, interest in new products remains strong, Scrutton says, as people consider multiple options.

And while 50% of Canadians report that “money is tight,” Scrutton says it is important to remember the other, more financially comfortable group and that there is “a significant consumer base for premium innovation.”

Canadians are expressing more eco-concern and are a bit more focused on sustainability than their American counterparts. However, though it’s been stable for several years, there has been a dip in the number of consumers willing to pay a green premium. “We ticked down considerably this year,” Scrutton admits.

But marketers are leaning into greening: 94% of marketers say their brand is working to be more sustainable, often taking the shape of  improving packaging waste and ensuring it is recyclable. Skepticism around green claims, meanwhile, is tapering off and “there is a general trend toward more trust in brands,” Scrutton says, while warning that still, 56% believe claims “can be misleading.”

Marketers need to consider green tradeoffs against price. If a better-for-the-planet product is done right, it can be very efficacious: 72% of consumers will trial a new eco-friendly brand, even in this, a high inflation environment.

While price was always near the top of purchasing decisions, the attitude toward it has “really spiked this year,” Scrutton notes.

One-third of the country’s leading marketers have reduced promotional activities, despite the fact that 60% of consumers are waiting more often for promotions.

According to the numbers, 52% of consumers are buying lower price brands, and 34% are buying store/private label brands. And the behaviour shift is being informed by 42% of consumers reading flyers more, 32% using coupons and 32% shopping at discount retailers more.

But rather than harbouring resentment, 53% of shoppers say deal hunting is fun. As Scrutton says, Canadians understand the environment and the supply chain and labour cost issues facing CPG marketers, 68% of whom had to raise prices to offset these costs.

Finally, convenience remains king. In terms of household items, consumers appreciate products that can be used for multiple tasks. In fact, 68% seek multi purpose products.