Much like training for a marathon, introducing new products takes careful planning and strategy. Each new product “race” is essential to the lifeblood of any good retailer. It boosts sales, drives excitement in the field, and maintains the brand of the company.
Many retailers do a great job of planning well for introducing new products. Still some seem to trip over the basics either significantly delaying or preventing products from making it to the finish line. In my experience, it is most often not the failure of complex supply chains, sourcing of raw materials, or even lack of attention from cross-functional support teams that cause unsuccessful transitions.
Most product transitions fail due to a lack of attention to detail or data to support decision making. A few minor changes in process and oversight of these transitions can go a long way to ensuring you are well prepared. Over the course of managing many Merchandise Transition projects, I’ve put together the following “training tips” to support you in your next merchandising race to market:
- Set a calendar – Churn disrupts the smooth operations of the store and even the introduction of new products can be negatively impacted by a poorly executed project. It is critical to establish a merchandising calendar that coordinates the efforts of cross functional teams. Taking the time to align teams like Design, Product Development, Marketing, Buying/Assortment Planning, Merchandise Financial Planning, Allocation, Replenishment, DC Operations, and Store Operations will build an organization that can efficiently and effectively introduce new product to the market.
The calendar must include the structure to handle large complex product transformations, but still be nimble enough to allow time-sensitive items quick passage through the funnel and into the stores. Otherwise, you are setting yourself up for failure, just at a more rapid pace than in the past. In other words, be disciplined enough to take pause along the course, as needed, but not at the hindrance of speed to market for hot new items.
- Pace yourself and base your plan on data – Many times, product is placed in geographies because it feels like the right place for it, only to find months later that the buying preferences of the shoppers in that location did not line up with the original understanding. Much of this is done in the spirit of aspiring to “sprint” by pushing new products in to beat the competition.
With advances in predictive analytics and the bountiful data that exists about like-product sales, it is essential all product placement decisions are based on data. Take the time to break down a product to its attributes and assort your products to those attributes that are most pleasing to the customer in that region. Analyzing the forces that are really driving sales for your products will improve the ability to properly cluster product and place the right product in the right locations for the customer. Speed to market is essential, but speed for speed’s sake limits your ability to analyze data and make steady, thoughtful decisions along the way.
- Research your course in advance – Invest in an understanding of what lies ahead. While some may have a complete understanding of what product is on every shelf, not all currently possess that capability. It is vital to focus on micro and macro space planning to gain every dollar possible out of the existing store. It is also important to understand what products should be less penetrated in the stores because online sales have outpaced that of the store channel.
To truly understand your space, you should be asking questions like:
- Do I have enough shelf space for the holding capacity that I need or will I have to sacrifice another product to make room for this new innovative product?
- Will the new product drive the value that equates to the shelf space that I am setting aside for it?
- Do I have the right holding capacity for each product on the shelves?
- Is there a better way to merchandise the product to reduce the store labor to maintain it going forward?
Answering these questions and others will allow you to best fit the new product into the existing space, or lobby for additional space if the business case is there.
Setting a calendar, pacing yourself, and researching your “course” in advance are integral to training for the merchandising marathon. After all, you spent all that money on the product, why sprint to market without a thoughtful, disciplined plan for maximizing sales?