Feature
Up to 80 percent of new product launches in the consumer packaged goods (CPG) industry fail, reveals a new study.
Conducted by Catalina, "New Product Traction Through Targeted Shopper Interaction" (registration required) looked into the buying behaviors of 45 million shoppers for the top 50 new, best-selling food and beverage products.
High Value Shoppers
“New products are so critical to CPG, but most fail,” she said. “Getting product launches right and achieving success is even harder and more important than ever.”
She added that engaging customers immediately upon release and keeping that engagement going is critical.
“It makes a strong case to be able to identify and engage likely, high value shoppers as soon as the product reaches shelves, and the need to be able to nurture customers throughout customer lifecycle.”
Top 4 Takeaways
Thompson gave CMSWire her insight into the top findings of the study, which cover drivers of success, customer retention and distribution.
1. Only a small fraction of consumers (1 in 143) drive the success of new CPG products
“New products are really focused on an extremely small concentration that drive success,” said Thompson. “Less than 1 percent of shoppers drive 80 percent of value – and the study only looks at the top 50 of all products launched last year.”
The study went on to find that those key buyers are worth 4.4 times more than the average new buyer.
2. Only 11 percent of new product consumers remain engaged after 52 weeks
“Once brands find buyers, they have a difficult time retaining them,” said Thompson. “It’s hard to keep people engaged even after they’ve tried, so driving retention is at least as important as acquiring new buyers.”
She added that marketers should understand that the need to grow and nurture buyers during and after launch cannot be ignored.
Learning Opportunities
Webinar
Jun
6
The Future of Social Media: Emerging Trends and How to Stay Ahead of the Curve
The impact of emerging technologies like AI on social media
Webinar
Jun
7
The Building Blocks of Personalization
This webinar will explore how personalization can create powerful ecommerce shopping experience.
Webinar
Jun
8
Attracting—and Keeping—Your High-Net-Worth Investors
Join PwC to dissect their recent survey findings on a specific customer subset — high-net-worth investors.
Webinar
Jun
13
The Future of Contact Centers with AI at the Helm
Learn how to balance human intuition and interaction with the potential uses of AI to create delightful and lasting CX
Webinar
Jun
20
3 Steps to Unlock Your Customer Data and Drive Revenue
Discover how Twilio Segment’s #1 Customer Data Platform helps implement data-driven strategies.
Webinar
On demand
AI for Marketers: Optimize Personalization Across the Funnel
Understand the benefits of utilizing AI across your entire marketing stack
“Many times new items are only supported in the first year,” she continued. “In the second year, there’s another new item. It goes back to continuing to nurture beyond the initial trial period and first year.”
3. 76 percent of franchise (brand) buyers never even try that brand’s new products
Although most purchasers of a particular brand don’t try their new products, the 12 percent who do purchase are worth a lot more over the customer lifecycle – a finding that reiterates the importance of retaining your existing customers, said Thompson.
“There is a significant opportunity for the franchise to grow volume from within, grow awareness cost effectively, and incent those to purchase from within franchise buyers.”
The study supports this view, as it found that consumers who buy both new and existing products from a particular brand spent almost four times as much as those who did not buy the new product.
4. Consumer packaged goods face a distribution problem
Finally, the study went on to reveal that it takes an average of 28 weeks for a new product to reach 75 percent of its highest distribution — a timespan that could create inefficiencies for media campaigns, said Thompson.
“If a brand manager starts a national campaign too soon, they could be wasting impressions and money when shoppers have no opportunity to buy the product. If they wait, then the new product is sitting on shelves with no marketing support to drive sales. The clock is ticking for retailers to analyze lift once the product is launched.”
What's a Marketer To Do?
In addition to nurturing customers across their lifecycle, Thompson recommends that marketers monitor new product performance daily so they can change campaign tactics based on that data.
“The findings demonstrate why data and purchase-based targeting is important to new products,” said Thompson.
“Metrics have been changing. The metrics marketers have used in the past have included redemption and click-through rates. We now need to focus on those most critical to driving product success — targeting trial, repeats, and percentage of consumers.”
