Lab42 has released the results of its new study that took 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.
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.
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.