Nice Product, But What’s in it for the Buyer?  12/4/2018


In a world of tremendous insights, low cost research and extreme focus on category and shoppers, many suppliers are still not coming to the table with the essentials to ensure a new item launch has the greatest chance for success.

 

While it may seem obvious, suppliers tend to overlook what is perhaps most important when presenting new items: viewing the proposed launch from the perspective of the retail buyer or category manager. After all, while they may think your product is unique, what is really important to them is what it means to their business. So any new product launch plans should begin and end with the retailer in mind, and your presentations to buyers should reflect this. Fortunately, with the tools at our disposal today, this can be accomplished relatively easily and at low cost.

 

What's in in for the Retailer?
Two key areas that must be addressed in any presentation to a retail buyer are the need for the product and the value it adds to the category.

 

  • How is this item different than what is currently on the shelf? What is being offered to the consumer that is unique, or what gap is it filling in the market?
  • How much will it contribute to category growth? What is incremental about the product? Will it bring in new shoppers, have them buy more or merely switch them from other products in the category? In addition, can you quantify the incremental dollars your item will deliver?

It’s very surprising to me how basic these things are and how many organizations still don’t get it right, or even consider them as part of their launch materials. I was recently in a launch meeting where a brand associate talked to sales about the incrementality of a new item to their brand, in a presentation that was supposed to go to their retail customers! I could just imagine the reaction if that was ever presented to a buyer. They had a great story, an innovative new item and strong launch support, but all were falling short without a good handle on category incrementality.

 

Regardless of the size of the launch, media support behind it and wow factor of the innovation itself, retailers want to understand the impact to their category. They need to understand added category sales due to the launch and where those sales are coming from. If you want the greatest chance of acceptance for a new item, this is something that should be added to your presentation materials and discussions. 

 

Quantifying Incrementality

The recipe to quantify incrementality is relatively simple. You need to understand total expected sales and source of those sales – new users, new usage occasions/expanded consumption and switching, which could also potentially be trade up (or down!). A combination of a simple survey, syndicated data and your launch materials (size of launch, number of SKUs, media spend, etc.) can quickly get you this information. This can be turned into 1-3 pages to quantify the incrementality of the launch and value to your customers and included in new item launch materials. 

 

Understanding and articulating category growth and incrementality, along with the unique value proposition of your innovation, very early in your product development process, will maximize retailer acceptance. More importantly, it will increase shopper interest and purchase, which will drive product and category sales – a win for the retailer, and a win for the brand!

 

Jon Troy

Partner
The Partnering Group

Jon Troy is a Partner at The Partnering Group. His experience spans CPG manufacturers in HBC, food and household products, food brokers and industry service providers, IRI and Nielsen. During his career he has built category management and shopper insights capabilities with such organizations as Boston Beer Company, Johnson & Johnson, Church and Dwight and Campbell’s. He can be reached at (215) 694-3302

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