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08th October 2018

Importance of innovation in new digital product development

There is a popular sentence on www, saying: If you’re planning on launching a new product, it will probably fail. According to Hannover Research, 60% products that fail to make it to market and more than 70% of product development projects fail to produce a positive return on investment. We could not help but wonder why is that.

Innovation, as defined by Business Dictionary, involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products.

As such, it makes sense that innovation plays such a significant role in introducing new digital products. But, what does innovation mean to the user and is it really something that motivates them to buy, use or upgrade?

We have done our portion of the research and we have found the following statistics very interesting.

➔ According to the study conducted by the research company Lab42, 84% of customers say it is somewhat or very important that the company they buy from is innovative.

➔ Based on the same, previously mentioned study, customers are willing to pay more for innovative products.

➔ According to PR agency Edelman and their study, 9 in 10 customers agree that brand innovation needs to impact society.

➔ PwC did a study where 43% of business executives that participated agreed that innovation is a “competitive necessity” for their organization.

➔ Nielsen’s Breakthrough Innovation research found that the top innovations launched in the U.S. generate more than $50 million revenue their first year.

Consumers are more powerful than ever and they are increasingly demanding and expecting more choice than ever before. Obviously, a perception of innovation is a significant factor in purchasing decisions.

Creating a successful digital product is not an easy task and new product failure rates are extremely high. As we all got a chance to learn, innovation matters – and companies can significantly increase their odds of success by uncovering the power of innovation since it is seen as vital in driving purchasing and improving customer experience. Innovation helps companies succeed, drives profitability and growth.

However, leveraging the power of innovation in new digital product development requires highly disciplined management and flawless organization. It all starts with the vision of what a company wants to become or be known for but the overall process requires support from the entire organization – from owner and executives to individual contributors, engineering and creative teams.

How your company drives innovation? Have some interesting and useful tips to share? Comment or reach out to Differenz team via info@differenz.com.