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New study reveals importance of innovation to consumers

News Editor | Jul 17, 2015 1,609 views No Comments

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Chicago, July 17 2015. Results from a survey released today by the innovative research firm, Lab42, take an in-depth look at innovation, revealing what it means to consumers, which sectors and brands people consider innovative, and whether innovation motivates them to purchase.

The key findings:

  • Perception of innovation is hugely important in purchasing decisions
  • Consumers are willing to pay a premium for innovative goods and services
  • Half of consumers say they have bought a new product without fully understanding what it did or how it worked solely because they thought it was ‘cool’.

Consumers care that a company is innovative and want to buy from them

84% of respondents say it is somewhat or very important that the company they buy from is innovative.

Innovation is seen as vital in driving purchasing and enhancing the customer’s self-image. 51% of respondents say they have bought a product without fully understanding what it did or how it worked because the felt or heard it was “cool”. 34% agree that they like owning products that make them look innovative to others.

Wanting to be first: which consumers like to be ahead of the game?

Nearly two-thirds (62%) of respondents have purchased a ‘1st generation’ product at least once. While consumers have a willingness to buy new products, they don’t necessarily want to be guinea pigs for the products. 21% of respondents buy new products as soon as they come out compared to 63% who prefer to buy them once they have been out for a while.

The study shows clear demographic differences in those consumers who want to be early adopters. For instance, of the consumers who purchase products as soon as they come out, 65% are men. In contrast, of the consumers who are more likely to purchase a product once it has been out for a long time, 59% are women. The allure of innovation does wear off with age – only 6% of older people (55+) buy first generation products. But it’s not just youth that drives the desire for innovation – the Generation X’ers are most seduced, with 49% of 35-54 year olds buying new products as soon as they come out compared to 45% of Millennials

Consumers will pay a premium for innovation

In addition to asking the respondents about their feelings towards innovation, the survey also asked them how much more they would be willing to pay for products from companies that they felt were innovative.

The table below shows the percentage increase respondents said they would be willing to pay within a selection of industries. Over 83% of respondents would pay more for innovation in electronics with 15% of these willing to pay over 40% more. In the automotive industry, 75% of respondents would be willing to pay an innovation premium, with 10% willing to go over 40% more.

For grocery store items, 67% of consumers will pay a premium for products which they consider to be innovative. And even in ‘dull’ categories such as insurance and gas, the data shows an innovation premium uplift with 54% and 52% willing to pay more, respectively.

Inventing, reinventing and listening to the customer are what makes a company innovative

More than two-thirds of those who took part in the survey (67%) say they believe companies are more innovative than they were five years ago. Research is seen as making an important contribution to innovation, with 69% of respondents agreeing that it is needed to create innovative products.

Consumers were then asked to rank drivers of innovation; ranking three in order of importance from the following list: coming up with new ideas, listening to customers, continuing to improve current products, offering a product that nobody else does, offering excellent customer service, technology, honesty, making consumers’ lives easier, treatment of employees, creative advertising, being successful with a limited budget, and philanthropy/community outreach.

This exercise clearly showed that coming up with new ideas for products and services is not surprisingly the most important driver. However, in a digital age, consumers understand that innovation is driven by companies listening to people, understanding and responding to their needs, and continuing to improve current products, as well.

About the methodology

The Lab42 Innovation Survey is based on 1,000 interviews conducted online between April 5, 2015 and April 9, 2015. The results were obtained using Lab42’s unique social media based sampling, where respondents are reached while they are engaging on social networks, games or applications, or e-commerce websites. The demographics of the respondents are representative of the US Population based on age and gender.

About Lab42

Lab42 was founded in 2010 by a team of entrepreneurs who saw the need for change in market research. The available options were too expensive, too slow, too inaccurate, or all of the above, so in true entrepreneurial spirit, they founded their own market research company. Currently headquartered in Chicago, Lab42 conducts custom, online market research projects smarter and quicker than traditional panels by reaching fresh respondents as they go about their daily lives – Lab42 connects with consumers on the platforms they’re most engaged with, avoiding the professional survey takers often found in traditional online panels.

Lab42’s offerings include a full suite of market research services – from survey writing, programming and hosting to results, analysis and infographics. Lab42 is market research, smarter.

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