With the economy still struggling and nearly every company in a cost-cutting frenzy, it came as big surprise when Accenture recently released a study claiming that the path to economic recovery lay with spending more money on developing new and better products.
The study, "Stimulating Consumer Demand Through Meaningful Innovation," is based on a survey of 3,500 people conducted in the United States and four key European markets--France, Germany, Spain, and the United Kingdom--in a range of economic levels. According to the survey there is an untapped resource among consumers: a desire for both high-quality and innovative items.
Brian Johnson, a coauthor of the study and leader of Accenture's marketing strategy practice, admits that the results of the study seem counterintuitive, but he argues that the demand for new innovation in the consumer sector is still high. "There is certainly a tendency for consumers to restrict their spending in this type of economy," Johnson says. "But our research indicates that if they believe that a product will be both innovative and improve their quality of life, seventy percent of those we spoke to are willing to pay more."
According to Johnson, consumers are very aware of the lack of innovation currently being offered across a variety of markets. Numbers from the study back up that assertion. In the United States alone consumers' confidence in business innovation has waned greatly. In markets like insurance, healthcare, education, and entertainment, on average more than 50 percent of respondents, felt there had been no innovation in the past two years.
It can be argued that this dissatisfaction among consumers comes from a lack of confidence in the economy and the bleak outlook for the near future. Johnson believes that that outlook can and will improve as companies begin to focus not only on markets people feel are vital to the quality of their lives, such as healthcare, housing, and entertainment, but on providing products and services that give consumers more of what they feel is a prized commodity: time.
"More than anything time has become the most valued commodity out there," Johnson says. "If you can provide a quality service or product that saves a consumer time, you're going to earn both their dollars and their loyalty."