(Article was published in Quirk's available here.)
The urban legend is that despite testing, the failure rate for new products launched in the grocery sector is 70-80%. Nielsen has put the number as high as 85% for CPG.
There are certainly legendary failed products that 20/20 hindsight would suggest: “What were they thinking?”
Orbitz Soda (arguably reminiscent of a lava lamp) was introduced in 1997 by The Clearly Food & Beverage Company of Canada, makers of Clearly Canadian and discontinued in 1998 due to poor sales. We might all have our opinions on the concept to start with, but it endures as a cautionary tale for what not to launch.
But let us say you are launching a product that seems by all measures to start from a good insight into consumers’ unmet needs, the historical odds of success are still not in your favor.
In an article in Forbes in September of 2019, futurist Blake Morgan listed 10 notable new product introductions of that year that failed. Morgan ends her article with the following:
“Launching a new product is always a gamble but taking time to research customers and the market and test the product can help avoid potential future failures.”
Of course we would endorse that view. But we would also take it a step further, and perhaps flip the narrative.
If the goal is simply reducing risk, we would argue that you are potentially missing a trick. We believe that the impact of optimizing a new CPG product and tip it towards success, be it a simple line extension or a radical innovation, can be amplified if you expand your validation and embrace a greater understanding of “context.”
We have always suggested that you understand product packaging in the context in which the consumer sees it in the retail environment, much more broadly described today as omnichannel, encompassing brick and mortar, e-commerce and the intersection of the two. But we recently realized that there is something that has always been obvious to us, but perhaps needed some restating.
Products at any stage of their lifecycle will stand a much better chance of success if you understand not only how they are performing at the shelf (or the e-commerce grid) but also how they perform in the context of the entire marketing mix, particularly POS marketing.
We recently started asking clients some really pointed questions:
- Do you need to develop a stronger category management story for your retail partners?
- Are you investing in the right POSM, ones that truly drive consumer behavior and sales?
- Have you been thinking about a better way to explore your pricing strategy?
The answers we have gotten back are compelling. Avoiding failure is a genuine concern. Retailers are rationalizing and ruthlessly delisting products to reduce the number of SKUs in their portfolios, and in many cases competing with well-known or new brands, prioritizing shelf space in favor of their own Private Label offerings. But getting everything RIGHT and optimal, in the context of everything that can influence consumer choice, is an even greater imperative.
So, what do we mean by broadening context? We have seen numerous examples of product and packs that tested well in isolation only to fail dismally in-market in the context of POSM or an unfortunate merchandising situation.
Pack validation alone can get you one read. Pack on shelf, better. Pack on shelf in the context of various channels, and retail categories with the ancillary shopper marketing components surrounding the moment of consumer choice? Now you have a clear road map of all the elements performing together so you can win, beating those new product odds against success… and not just avoid failure.
Which in part is why we developed the Shopper Flash tool within our OmniPath™ shopper marketing consultancy. Shopper Flash allows brands to simulate shopping environments (mass, grocery, convenience and even drugstore) to provide a 360° view that illuminates the points in the consumer path-to-purchase in which circumstances are optimal to influence consumer choice. Shopper Flash can identify these opportunities as they are driven by the pack, planogram, the retail environment and the supporting POSM.
If your nostalgia for Orbitz soda persists you might have to satisfy it with a purchase of the Orbitz inspired Lava Lamp on eBay!
But if there is a product your brand is preparing to launch where you need a 360° view to give your marketing optimal potential for success, let us help.
ABOUT THE AUTHOR
Ian Elmer is the US Managing Director of PRS IN VIVO, leading the US Client Development and Qualitative Teams, responsible for the growth objectives of the region. He has over 20 years of experience influencing global marketing decisions for some of the world’s most iconic brands. At Kantar, where he served as the Global Account Director, he was responsible for leading strategic partnerships with some of their largest global clients. Previously, he also held senior client and practice management roles in both the United States and United Kingdom with Millward Brown.
He brings with him a great breadth of research and consulting knowledge across an array of industries, with a proven track record for driving growth in a rapidly changing industry.