By Tom Juetten
Thousands of new CPG products are introduced every year, a majority of them food and beverage items. Millions of dollars and countless hours are spent concepting, forecasting, creating and marketing these products. And yet, a whopping nine out of ten new products are considered failures, even when they have high topline sales.
In a marketplace that is constantly evolving and where consumer preferences and shopping habits seem to change at breakneck speed, how can you make sure you succeed with your new product innovation?
Even with all of the many product choices and places to buy those products, both of which continue to grow, there are a few key ways to increase your odds of success. One way is to more quickly find, size and exploit breakthrough innovation opportunities.
Before undertaking any innovation project, you need to know the answers to these questions:
1. How do shoppers define the market?
2. Which product attributes define and predict this market?
3. How big and how incremental is the white space?
Knowing these answers requires an unbiased shopper perspective as well as the ability to accurately and quickly (meaning within a few weeks) forecast new item performance.
Predictive data helps make this possible. We all know that claimed behavior – people saying what they did a few days ago or what they bought the last time they shopped – is incomplete at best and misleading at worst. If you understand what they bought through frequent shopper program data, or if you can access it through your data partner, it’s a lot easier to predict what they will buy next. Using actual shopper behavior allows you to dig in and understand a number of different areas, including where category switching is happening. And, when you combine frequent shopper data with panel data, you end up with a more robust understanding of where the real opportunities lie.
Finally, it’s important to be able to access integrated support from the beginning of any new product development. This includes from the start of the innovation process through product development and activation planning, as well as the product’s post-launch assessment and adjustment. This end-to-end support will help ensure your success. For example, measuring switching between categories using actual shopper behavior will help you forecast your performance, while a deep post-launch assessment can help you make tweaks to your pricing or promotion.
With more products entering the CPG marketplace each year, including those from smaller and more niche players, the competition is fierce. Using predictive data, a more integrated process and faster forecasting can give you a leg up on the increasing competition.
Questions on how to make your innovation more effective? Contact me at Thomas.Juetten@IRIworldwide.com.