The New Product Dilemma
Specialty distributors can be an invaluable resource in helping retailers leverage the high level of product innovation in the pet industry.
Retail orthodoxy says new products are the lifeblood of retail success. Without new products, your store will lack freshness, the argument goes, and consumers will stop coming in. Grocery chains and mass-market retailers have certainly embraced this philosophy. Point-of-purchase (POP) displays litter store aisles like traffic cones at a construction site. Endcaps change as often as the weather.
U.S. packaged goods companies introduce 30,000 products every year, according to an article in the Harvard Business Review by John Gourville. But 70 to 90 percent of these products don’t stay on store shelves for more than a year. Gourville argues that new products often require consumers to change their behavior, which they are reluctant to do.
But consumer trends often drive change in product development. In the pet industry, consumer demand for “natural” ingredients, whatever that term implies, has led to an explosion of products with that label claim. Manufacturers’ desire to appeal to the coveted Millennial generation has also driven new product development, as 24 percent of that demographic classify themselves as early adopters—far more than any other generation.
What’s a Retailer to Do?
You know you need new products to drive traffic to your store and keep customers coming back. Yet you also know that a large percentage of new products are going to be collecting dust on your shelves months after you bring them in, due to customer indifference. How do you increase your chances of picking more winners than losers when the odds are stacked against you? Your distributors are a valuable ally in the fight for consumers’ hearts, minds and wallets.
There is no substitute for doing your own homework when it comes to identifying new products to add to your inventory. Visiting trade shows, reading trade magazines and talking to manufactures’ reps are all useful tools. Your distributors can serve as an extra set of eyes and ears in helping you discover new items to boost your sales.
Here are a few ways that distributors can help with the heavy lifting:
New-Product-Vetting—Distributors work the major trade shows just as hard as you do, meeting with current suppliers to see what’s new and searching out new vendors with unique products to add. Between shows, buyers meet frequently with manufacturers’ reps for new product demos.
Market-Intelligence—Distributors work with hundreds of retailers across a broad geographic area. They know which products are working in other markets, and which aren’t. So what if the independent across town has some of the same new items; the local big box store or mass merchant won’t. Be first to market in your market, and discover the next hot item.
Introductory Discounts—Distributors and their suppliers want new products to succeed, so they will often offer introductory discounts on those items as an incentive to buy and try. Take advantage of these offers, set up an end cap display and pass your savings on to the consumer.
Your distributors’ weekly sales sheets may have 10 to 15 new items—40 to 60 each month. If 10 percent of your sales aren’t in new products, you are missing opportunities to add to your bottom line.
Let your distributor be a business advisor, helping you add SKUs to strong categories and round out shelves that might be under-merchandised and under-performing. You don’t need a crystal ball to beat the odds on new product success. Just trust your distributors and know that they succeed when you succeed.
Steve King is a 35 year veteran of the pet industry. He is currently president of the Pet Industry Distributors Association and executive director of the Pet Care Trust.