FMCG suppliers need to work harder on the basics of demonstrating how new products will drive sales for retailers, online and in-store, after recent research suggested that the UK’s grocery retail sector wastes an estimated £30.4m on failed product launches per year.
Category management and shopper marketing specialist Bridgethorne was commenting after research from E Fundamentals also claimed that over £2.1m is wasted through online grocery platforms and that 63% of products analysed had errors in their listings with the major online grocery retailers. Bridgethorne says there is work that should be done to give new products the best chance of success much earlier than the point at which they are listed or appear on digital or physical shelves.
“The market is becoming increasingly competitive and suppliers need to prove the role that a new product can play in delivering category growth,” explains Nick Kirby, Bridgethorne’s Shopper, eCommerce and Analytics Director. “First and foremost suppliers have to demonstrate how new products will drive sales and increase a retailer’s overall market share.”
Kirby adds that developing detailed shopper insights better enable suppliers to understand the demands of the shopper and whether a new product will meet a genuine need and create a new revenue stream.
“Shoppers spend little time browsing whole categories so suppliers need to focus on products that standout at key stages of the shopper journey, catch the attention of the shopper, and lead to sales. These will be the products that meet the needs of the shopper, increase category sales and work best for retailers.”
When it comes to eCommerce specifically, Kirby says that “ratings and reviews left by shoppers on retailer websites can provide valuable guidance as to whether a new product is likely to meet the needs and expectations of shoppers and consumers. This can be supported with analysis of conversations taking place in locations such as recipe forums to identify the challenges faced by home cooks, how food fits into their lifestyles and what food trends are on their radar.” This, he says, “is a rich source of information at any manufacturer’s disposal”.
“A key consequence of shoppers and consumers sharing more information and views about products and trends is that the lifecycles of some products could become shorter,” continues Kirby. “This will mean that food innovation pipelines will need to become faster and more agile to respond to quicker to an immediate shopper and consumer need.”
He adds, “Once listed, ensuring products are implemented online effectively is critical. If a supplier went into a physical store and found a gap on the shelf where their product should be located or a shelf label with errors, they would rectify the mistake immediately. So, why would this be any different in a digital environment?”
“Understanding how best to implement new products on a digital shelf is essential and this can start by undertaking an audit of a supplier’s digital shelf execution, whether that be for new products or an existing portfolio. This will provide an assessment of current discoverability, navigation, content, imagery, ratings & reviews and identify opportunities to improve engagement in the pre-commerce phase of the shopper journey and convert them to purchase when they are shopping.”