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Innovation in the Kitchen-open

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whitepaper

March 2019

Innovation in the Kitchen

Of all the industries tracked by The NPD Group, the home industry has been one of only a handful of superstars in recent years, growing at 6 percent in 2018, as shown by NPD’s Retail Tracking Service. 2019 will be another good year for the home industry, but the growth rate will likely begin to slow to the 2.5–4 percent range. To keep the momentum going, the home industry needs to innovate. In this paper, we’ll explore how home brands can innovate, with an emphasis on the kitchen.

Summary:

  • Smart kitchen presents new opportunities to leverage technology to change the way consumers cook and eat.
  • Creating innovative products won’t go far unless brands can generate demand. Brands, retailers, and grocers must find unique ways to tell the “innovation story” and demonstrate how their product makes the consumer’s life easier.
  • Brands, retailers, and grocers which invest in their own digital platforms will have new opportunities to innovate their assortment and generate new demand. As smart kitchen creates a new ecosystem of products, digital platforms will be more important than ever.


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Smart Kitchen

Smarter technology is pushing into more areas of people’s lives, providing solutions to address a wide array of consumer demands and driving toward a more seamless consumer experience. The biggest innovative force in the home will likely take place in the kitchen. Food Industry Advisor David Portalatin believes that the adoption of smart appliances has the power to transform how people eat. Advances in technology can have a positive impact on every step of the meal preparation decision-making process. See the chart below to find out the innovations already happening today and what the future could hold.



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Smart Branding

Innovations in the home, such as smart kitchen, have potential to transform the way consumers shop and give brands more influence in a buyer’s decision-making process. However, all the innovation in the world won’t go far unless consumers adopt those products. Fostering a vision of how they can make a consumer’s life better will be critical. This will require smart branding. For example, categories like vacuums and hair dryers deemed standard by consumers have become increasingly exciting, as brands like Dyson drive higher ASPs in their categories through product innovation and effective marketing. Kitchen brands should apply learnings from other categories in the home to win increased spend from consumers.


The first step to winning spend from consumers is to win mindshare. This has always been true for brands in this space, but with the rise of social media, the approach is now different. We have evolved from the old traditional ‘buy 60-second TV commercial’ to increased brand storytelling because of the advances in social media, which makes it easier for more brands to tell their story."

Joe Derochowski Vice President, Industry Advisor



Digital channels are highly effective tools for communicating the innovation story. For example, when Dyson recently released a $500 23.75-karat blow dryer, the brand used online video to share the story of how it engaged with a “master gilder” to preserve a traditional craft, while highlighting several steps of the production process. Despite being more expensive than the competition, Dyson had 40 percent dollar share of the online hair dryer market in the 12 months ending December 2018 (the highest of any brand in the U.S.), and was the top DTC retailer in the category, shown by Checkout E-commerce Tracking information.

Digital Platforms Create New Opportunities

The rise of online shopping and DTC channels has given power to brands, retailers, and grocers to rethink traditional assortment layouts and find new ways to appeal to consumers through suggestive selling. Creative digital layouts, like Safeway’s, assort products based on consumer needs rather than what works for the grocery store, and provide new opportunities to promote their private labels. As the smart kitchen grows, entire new product categories will be created and existing categories will become “smarter” through increased connectivity. All of this change will require brands, retailers, and grocers to educate consumers—an opportunity for suggestive selling to make the consumer’s life easier while promoting specific products. Robust digital platforms will be instrumental to these efforts.

Get Ready for the Future

These are just a few examples of how successful brands and grocers are innovating for the future. To thrive today—and tomorrow—it’s essential for brands, retailers, and grocers to understand how consumers will interact with new technologies, collaborate with relevant players in adjacent categories, and communicate added value through smart branding and robust digital platforms.


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