Before COVID-19, the adoption of technology-driven research techniques was limited, and progress was slow. Whilst many CEOs and Chief Insight/ Innovation Directors seemed excited about a cheaper, faster, more quantitative way of understanding consumer wants and needs, few had the confidence, or company backing to make the leap. Unfortunately, this mindset meant these companies have been getting left behind. Smaller, more innovative players have entered the market, released new products, and taking more and more of their market share.
The arrival of COVID-19 has challenged this approach to innovation. Primary research in the form of surveys and focus groups, has become almost impossible. Brands are now being forced to make changes and adopt the technology that could take their place. They need to reset their understanding of their customers and consumers, and they need to do so in a more continuous and agile way than they have needed to before. With that in mind, I thought it would be helpful to share some thoughts from me, my colleagues, and a few of the industry leaders I get to work with, on how this can be done.
Before COVID-19, adoption of research-tech was still low
Even now, in 2020, many global CPG giants are still heavily reliant on qualitative ‘field based’ research. As we all know, these approaches are long and expensive, and therefore, often mean companies are releasing new products far behind the market. Increasing levels of competition, brought in by smaller, more specialised firms, has left larger players with two options; develop the capabilities to understand trends earlier OR accept that you will stay relevant through acquisitions. Unfortunately, as Harvard Business School professor, Clayton Christensen, points out, innovation is tricky to great right. Given his claims that “of the 30,000 new consumer products launched each year, about 95 percent of them fail”, what can companies do to innovate quickly, and with more success?
Fortunately for them, predictive tools and techniques now exist, that can not only reduce the time and cost of traditional research, but also remove the bias and limitations that use to come with them. Black Swan’s Head of Data and Methodology, Dave Soderberg, explained that “traditional research techniques often allow elements of subjectivity and ‘gut-feel’ to creep into decision making. Whilst survey data can be turned into stories that are used to influence the people and politics in a business, more advanced uses of data cannot. This is why we see more success in companies who have adopted analytics, and more importantly, greater shareholder return”.
Fortunately, companies further along the adoption curve are already realising the benefits of these technologies. For example, Craig Slavtcheff, Executive Vice President of Global Research & Development at Campbell, stated that “The promise of AI as it relates to innovation, sits in predictive analytics, ideally increasing our success rate by directing us to the right designs, for the right consumer, at the right time. Most innovations fail on one or many of these targets.” This is why Campbell’s overall approach to innovation continues to “leverage signals from various sources to instruct innovation pipelines”, using this insight to “design against six macrotrends across the food industry, such as convenience and more accessible functional wellness.”
Social data is just one example of how companies can now generate valuable insight. In an interview with Yannis Dosios, Head of Emerging Businesses at Twitter, he shared that ‘academic researchers have been working with Twitter data for years because it captures people’s authentic thoughts and experiences, and is a way of connecting with the world in ways traditional methods cannot’. Ten years ago, there may not have been enough consumers talking online about crisps, hairspray, or multivitamins to provide valuable insight. However, developments in data science have come at the same time as a critical mass of online conversation. Researchers are no longer limited to asking predetermined questions to a small number of consumers, and can now analyse the conversations of millions, about a wide range of consumer product categories.
Despite the success of some early movers, the overall adoption rates of these technologies are low and only slowly rising. For example, McKinsey’s report into digital technology adoption showed that only 13% of retail companies were using AI as part of their product development. They put this down to a series of challenges, that I think can be synthesised as the ‘if it isn’t broken, don’t fix it’ mindset. A dependency to doing what has done before.
COVID-19 has made primary research almost impossible
Understanding and anticipating changes in consumer behaviour has never been easy, but the recent social distancing and isolation practices in place across the globe, mean it has become even harder, if not impossible to keep trying to do so through traditional primary research techniques. The Market Research Society (MRS) has now advised against face-to-face market research due to concerns about the risks it creates for researchers and participants. Michelle Gansle, Insight and Transformation at Mars Wrigley, also recently shared the larger pitfalls of using this kind of research during this period, rationale which has led to “a pause on everything that is not in context, or in moment research”.
Despite these limitations, companies are still asking “how and where do I pivot?”, “how do I respond?”, and in some industries, “how do I survive?”. Just like a child who loses their stabilisers and realises they can ride on their own, companies who want to continue innovating, are realising that technology now means they can. Just like communication technology is helping them work effectively from home, access to real-time data and research-tech allows them to watch, analyse and act on the evolving needs and wants of their consumers.
Social media has created the world’s largest focus group, giving companies access to the real-time conversations about what people are consuming, when they are consuming them, and what they think about their experiences. Twitter’s Yannis Dosios shared that these “real time and authentic conversational insights can not only help us understand the physical impact of coronavirus, and how much it has spread, but also some of the societal impact, such as how it has changed mindsets about work/ life balance, remote work, wellbeing, perceptions of facial coverings, among many other things”.
How brands can outline a road map for ‘digital maturity’
So, given that these technologies will be new and daunting to many insight teams, how can companies move forwards?
Twitter’s Yannis Dosios, helpfully explained that when it comes to the use of social data “every brand is at its own stage of its digital maturity. We see a lot of brands who start by first listening to their audiences. This conversation can be indicative of a problem or an opportunity – by listening and stepping in quickly, a brand can help identify something newsworthy or remediate an issue. Following on from that is active engagement with audiences, for brand voice, marketing campaigns or customer service, amongst others. Further on, analyzing the conversation can provide a better understanding of what these audiences are talking about, doing, or buying, which is where solutions like trend analysis come into play. New use cases of social data creating impactful ways for companies to gather intelligence and connect with customers, communities and the public conversation continuously emerge; it is very exciting to see this dynamic space evolve.”
Many organisations that have started deploying new technologies may feel they have a long way to go in realising their full potential. However, they seem to be excited that they have the initial foundations in place, a plan for building on them in the future, and that they have been able to continue generating insight that can feed their innovation throughout this period.
It is a challenging time for every industry, but acting now can help companies prepare for the post COVID-19 world (and customers), and break the status-quo in how they do research that has been holding them back until now.