Higher‐order needs drive new growth in mature consumer markets Available to Purchase

For most of the past decade, it has been tough to find growth in consumer sectors such as packaged goods, media, food, and electronics. The proliferation of new brands and products has made operations more complex and expensive, while consolidation among retailers and the rise in private‐label store brands has shifted pricing power away from suppliers in household and packaged goods. A few consumer companies, however, are prospering or starting down new avenues to growth. These firms have moved beyond product innovation to emphasize demand innovation, which entails understanding the higher‐order needs of consumers, and then creating service and product solutions that directly address those needs. Mercer’s research has documented at least a dozen patterns of demand innovation in consumer markets. Some are relatively simple steps to enhance a product or service and thereby steal market share and expand margins. Others allow companies to leverage their assets in more radical ways, opening up entirely new opportunities. The experiences of Kraft, Procter & Gamble, and Netflix show how consumer companies can improve the consumer experience and find incremental ways to grow in the process.