Consumer products and retail companies struggling to innovate

Majority of consumer products and retail executives feel that collaboration with smaller entrepreneurial firms has become increasingly important to drive innovation and achieve strategic goals, says an EY survey.

As per the survey of 267 consumer products and 66% retail senior executives globally, it was noted that only one in 10 deem their companies to be effective at both sourcing potential collaborators and aligning incentives between the two partners.Further, only one in five respondents around 19% emphasize that they are very effective at achieving an increase in revenue. While, 16% in achieving margin increase, and only 10% are effective in generating intellectual property from such partnerships.

According to EY's Global Innovation and Digital Strategy Leader, David Jensen, “Succeeding in the age of innovation requires companies to rethink their approach to new product and process development. Companies must collaborate with external partners, particularly smaller entrepreneurs, to identify, develop and scale up promising new product, and process ideas. Additionally, companies need to look at innovation opportunities beyond just products and processes, and consider business models, consumer experiences and brand engagement as part of an overall innovation portfolio.

"Besides, the smaller entrepreneurial firms offer the agility and creative thinking that larger organizations need to unplug innovation bottlenecks. Overcoming the difficulties of collaborating with entrepreneurs will be critical if companies in the sector thrive in the long term." David added.

Delivering agile innovation is an EY executive summary based on two key strands of research. In-depth interviews with about 60% of executives representing CP firms and 40% of executives representing retail were conducted as a part of the survey. The respondents were spread evenly around the world, with close to one-third each from EMEIA, Asia-Pacific and the Americas.