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It’s Not Easy Being the New Kids on the Block

There are approximately 30,000 new products coming to supermarkets every year in the United States. The number of new product launches in different countries would presumably be high also – especially with innovation being a possible route to grow. Research at the Ehrenberg-Bass Institute shows that around one in four new products will not exist one year after the launch – and this failure rate would increase to 40% when we expand the period to two years.

Part of the reasons why there is a constant churn of new products is consumers’ variety seeking nature. From business perspective, retailers may also request manufacturers to come with new products to keep shoppers interest to the category and to justify the brands’ real estate across the retail chain. There is, however, a possibility that launching new products is part of an internal KPI – regardless of any solid business case. Remember the time when every brand of spirits and soft drinks seemed to launch a blood orange variant?

As a marketing scientist, doing my regular grocery shopping allows me to see the nature in the wild – just like Jacques Cousteau diving deep into the ocean or Jane Goodall spending time with the chimpanzees. So, it was an interesting expedition a while ago when I spotted a number of new products that I never noticed before, while I was doing my grocery shopping in a suburban supermarket – here in Adelaide, Australia.

As a heavy category buyer across salty snacks, I am aware of a wide range of products and variants – including the flurry of ‘good-for-you’ products that are not made out of potatoes or corns. I sometime buy vegetable crisps as well – not because of their reported healthier quality – but merely because they taste good and they are regularly on promotion. So, it was a surprise when I saw a brand I purchase sometimes with new flavours I wasn’t aware of: Lime Chilli and Smoky BBQ … and they were already on clearance sale. I’m a light brand buyer of this particular brand – and when I do, I buy the original variant. (Postscript: A week later I visited the same supermarket, and both variants were still on clearance sale. I suppose the products weren’t clearing fast enough!).

In the same trip, while traversing the aisles, I came across a new section of zero-alcohol spirits. Being a gin drinker, I am familiar the usual bottle shapes and the brands in this category. Whilst I was already aware of 0%-alcohol beer and non-alcoholic wine, I didn’t know that 0%-alcohol gin existed.

Now, across these two categories, the new products were on promotion. However, the first example is a brand offering two new flavours that might not resonate well enough with shoppers. The second example has two brands from the same company, offering potentially new consumption possibilities across multiple formats, and fulfilling possible new Category Entry Points (CEPs).

One of the key considerations when launching new products should be a clear strategic intent and the job-to-be-done by the new entrant. Across categories, new flavours (or formulations, scents, …) can still expand the buyer base if they address different palates and preferences. However, with the large assortment of features out there, the newcomer is likely to end up being a minor selection when compared to the core offerings, anyway. New entrants may stand a better chance if they address untapped needs, just like the 0% alcohol variants due to personal preference, dietary, or lifestyle needs. A successful example is the popularity of zero sugar soft-drink variant that has now become part of the core offering across many brands as they address a key dietary requirement.

So, even if new products launch are short-term (seasonal or special editions) or are planned for the long haul, they should have a clear reason for being on shelf. They should also then need to be supported through clear physical availability and mental availability activities – such as wide distribution as well as advertising activities so more buyers would know and have the opportunity to buy … otherwise, they may unintentionally be set to fail.

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