NEW LAUNCHES: HOW MUCH IS TOO MUCH?

Stephanie Fagnani

As we all know, trade shows are an appropriate venue for manufacturers to showcase their wares, particularly the hottest new products in their portfolios.

Walking the exhibit floor during the recent Food Marketing Institute's annual convention, I found myself thinking: That's a great idea! Why hasn't anyone thought of something like that before?

But, after reviewing notes during a presentation delivered at the show by Information Resources Inc., two questions came to mind: How necessary is this? How will these new products fare in the highly-competitive consumer packaged goods environment?

As reported by Sarah Mulholland in SN's May 14 issue, IRI's research found that between 20,000 and 30,000 new CPG products are introduced annually. Most of them are slated for Center Store. That amounts to a lot of selection on supermarket shelves, particularly for those shoppers that rarely ever stray from their favorite national brands or private label.

More than half of new CPG introductions tracked by IRI over a two-year period were unsuccessful. This not only negatively affects the vendor that invested heavily in the product launch, but also the retailers who may have discontinued certain items to make room on their shelves for this new underachiever. How can retailers guard against the high risk of new product failure?

For the most part, all retailers are armed with is their promotional savvy to draw attention to a new product or line. However, with the right approach, some say this may be all that is needed to sway consumers to give a product a shot.

Although it's impossible to lure every consumer to a new product, the right promotional campaign can increase the frequency of consumer trial, according to Sue Klug, president of Catalina Marketing Solutions.

"Thousands of stockkeeping units get wiped out of the category set just because I [the consumer] don't have the need for them," Klug said.

However, the retailer is always trying to build return on investment on their shelf space, "and every item is expected to pull its weight," said Klug, a former senior marketing executive for both Vons and the former Luckys in Southern California.

There are two qualities retailers should look for in a new product. One is the item's ability to lead to other related sales -- such as tortillas that can be merchandised in a Mexican ensemble with salsas and beef. Another criteria is an item's sales potential in alternative format stores that a grocery retailer may want to take on as a competitive ploy, Klug said.

Working in conjunction with vendors on promotions is key for retailers trying to push the success of a new product. For example, when the typical vendor-supported media blitz begins to hit, whether in the form of FSIs or national television spots, retailers should jump to offer price reductions, feature off-shelf displays or sample the item in-store.

"They should look at their own go-to-market strategy, marry it with the local media, and push those together," Klug said.

So, the answers to my questions may lie within the collaborative relationships that are crucial for new products to survive.

Is this all necessary? Yes, if only to keep in motion the competitive selling environment that punctuates the grocery industry of today and tomorrow.

How will these products fare? Well, that one remains to be seen. But, the next time I come across a heavily-marketed new product, perhaps one historic and highly-successful promotion at both the retailer and vendor level will come to mind. To paraphrase: "Try it -- you might like it."