Recommendations from friends, family, creators and online reviews drive more than six times as many new product trials as paid advertising, according to new research from Social Soup, raising questions about how FMCG brands approach product launches.
The research found that among main grocery buyers who had recently tried a new product, 27 per cent said another person was the biggest influence on their decision, compared with just four per cent who named paid advertising across TV, social, digital and outdoor.
The findings come as FMCG brands continue to struggle to make new launches stick, with Nielsen data showing 76 per cent of FMCG product launches fail within their first year.
Social Soup’s nationally representative survey of 850 Australians aged 18 and over was presented yesterday by founder and CEO Sharyn Smith, alongside brand strategist, Four Pillars Gin co-founder and StoryWork podcast host Matt Jones.
The research also uncovered generational differences in how Australians discover new products. Shoppers aged 18 to 34 are almost four times more likely than those aged over 55 to name a creator as their biggest influence, while 45 per cent of shoppers over 45 rely more heavily on what they see in-store.
Despite the growing importance of recommendations, Australians are still keen to experiment, with 79 per cent of main grocery buyers having tried a new food, drink or household product in the previous three months.
Of those, 51 per cent bought the product on the spot, while 83 per cent made a purchase within a week of first seeing it.
And the word-of-mouth effect doesn’t stop at the checkout. Social Soup found 78 per cent of people who try something new go on to tell others about it, sharing their experience with an average of 15.1 people.
Most of that conversation happens offline, with 68 per cent discussing new products in person, compared with just six per cent posting about them on social media. Meanwhile, 62 per cent of people who hear about a product from someone else go on to buy it.
Smith said FMCG marketing had shifted from an attention economy to a trust economy, arguing that brands needed to rethink launch strategies built primarily around paid media.
“Most launch plans are still built around buying reach, but shoppers are deciding what to try based on what the people around them say,” she said.
“A creator who buys the category every week, or a friend at a barbecue, will do more for a new product than another TV spot.”
The research also explored the role of price promotions, finding that half of all new product trials are purchased on special, with waiting for a discount the number one reason shoppers delay trying something new.
However, discounts appear to have little impact on whether customers return. Some 57 per cent of people who bought a new product on special purchased it again, compared with 55 per cent of those who paid full price.
“Discounting is the first lever a lot of brands reach for at launch, and with cost-of-living pressures front of mind it’s easy to see why,” Smith said.
“Our data shows a discount can generate the first purchase but it makes no real difference to whether people will come back. Recommendation gets people to pay full price in the first place.”
AI is also beginning to enter the product discovery process, although its influence remains relatively small. One in 30 shoppers said they had used an AI tool to help decide on a new product, rising to one in eight across household, personal care and health categories.
In those categories, shoppers are using AI to compare ingredients and summarise reviews.
Jones said the shift towards AI and creator-led discovery meant brands were losing some of their traditional control over how products are presented to consumers.
“The 20th century was this era of control. We made the product, wrote the ad, bought the media and controlled the message. We are now no longer in control,” he said.
“AI increasingly decides what is said about us. We need to empower creators to talk about us.”
Smith added that AI tools were increasingly drawing on the experiences and opinions of real people, making reviews and community content important to brands looking to appear in AI-generated recommendations.
“Those tools are summarising what real people have already said, so reviews and community content are what they’re reading. Brands that want to make the AI shortlist need real people talking about them first,” she said.
