If your company manufactures do-it-yourself products, chances are good that new product development is a key part of your strategic plan. New products often serve as the life-blood of DIY categories that have come to expect a continual flow of new choices. As you look at current revenue and profits, you might ask how much of that financial performance was due to products you've introduced in the past 5 years alone. In many categories that number can easily exceed 50%. To make sure your new product development process is doing all it can for company growth and your brand position at retail, here are some practices we have noted to be successful in the DIY channel.
First, let's consider what tends to undermine success. Surprisingly, many of the most common pitfalls are not related to the actual product itself. This is especially true in the do-it-yourself space. Every industry, it seems, has experienced massive consolidation in the last couple of decades. But few industry consolidations have been as dramatic as in the home improvement and do-it-yourself category. It is obvious that the rise of the big boxes has been, and continues to be a boon for our industry. With huge warehouse stores to fill and a seemingly unending appetite for tools, gadgets and materials, it has been a great time to serve the DIYer. But the growth has also come at a cost. Often if you do not get your products on the shelves of the top “destination” retailers in the category, your chances of success are seriously limited.
Avoid these common obstacles to new product success
- You missed the line review schedules of top retailers
- Crowded or declining category leaves little room for expansion
- Your offer is not compelling to the merchant - product story, pricing/margins, packaging
- Your company is unproven in service and support on a national scale
- Potential channel conflicts - pro vs. consumer, ecommerce commitments, exclusives with competing retailers
- Another brand beat you to the punch
- You are being out-marketied in the category with competitor advertising, social media presence and other initiatives
To give your NPD process renewed energy and set a new direction for this critical element of your strategic plan:
Tip #1: Make sure success is in your New Product Development DNA
It should go without saying that your new products need to be the RIGHT new products for the market and solve an actual problem. Sound simple? It’s not. Too often an organization gets caught in a development cycle that does not produce good products. They might be working toward an outside imposed deadline, such as a line review. Good ideas for new products don’t often materialize on the schedule you would like. So the pressure of an upcoming line review for example often forces manufacturers to throw out ill-conceived new products or half-baked “enhancements” to products in order to overwhelm the buyer with options, with the thinking that “something will stick”. Or, companies may create internal pressure by tasking product managers to introduce a new product every year, with more focus on timing than on product success.
Break this cycle and start building success into your NPD by asking one simple question: “What is the new product’s single biggest reason for being?” Every product category is more complicated than it seems on the surface, so engineers and product managers are often all too happy to expound on the many features that have been built into a new product. This laundry list approach can be too “inside baseball” for most buyers and users. If they have to dig too deep to find out what makes your new product special, it probably won’t be selected. So instead of focusing on 25 new features, find ONE key benefit for the product and make this your rallying cry. That means doing your homework up front and finding a single real problem that users of your product can identify with. It may be a problem that requires a complex list of improvements and innovations. Or, a very simple change could provide the solution to the problem. Either way, make sure everyone on the NPD team knows what the single biggest reason is for developing this product and carry that messaging throughout the development cycle.
If your product manager cannot state in one or two sentences what the “reason for being” is for his or her new product, you are likely treading on dangerous ground. Think of this “reason for being” as your product’s elevator speech. Your engineers and product manager can’t be in the store explaining the product’s feature list to perspective customers. So, make sure the reason for being is compelling and the main thing that is communicated in all of your marketing materials.
Finally, when testing your new product, make sure it delivers on that singular, compelling message. It may be fine to provide additional features and test for many different things. But, as in the development cycle, the testing phase should focus on THE key attribute of the product. Maybe your new product is the first of its kind that can be “Installed in under 30 minutes with no tools” or “Cuts Utility Bills in Half” or “Runs twice as long before recharging”. If the final product does not deliver on this promise that you set out in the beginning, your development has failed and your product is likely to not succeed in the market.
Tip #2: Get input early and often from the buyer or merchant
For some manufacturers, working with a buyer during the development stage of a new product may sound like blasphemy. You may be thinking that your products are developed from a market-driven user-perspective (as they should be), so why show the buyer before the product is ready for launch? After all, he may tell my competitor what I am up to, or he might ask for ridiculous changes to the product. These concerns are real, but can be managed by your sales and marketing team. Knowing that a very small number of buyers can control the destiny of your new product, it is best to get them involved early. Doing so will encourage an atmosphere of acceptance before you lock in the product design, tooling and other finishing steps.
If you do decide to preview your product concepts with a merchant, make sure he understands the one key problem you are trying to solve. Show him that you understand the market and have determined that you must fix this particular issue. If you can offer research that backs up your assumption, and there is general agreement that a new product is needed to solve an issue, you are already well on your way to success. Assuming you bring him a product that delivers on your stated goals, he will immediately see the need to put it in stock.
Once you have established in the buyers’ minds that there is a need for your new product, bring him in on selected phases of the development cycle. If you are working on something truly innovative, or are in a category where copy-cat products can be quickly developed by your competitors, have him sign a non-disclosure agreement before showing him your progress. Your buyer may be able to provide you some valuable insights that you can incorporate into your development. Just remember to stay in control of the conversation. Do not succumb to “feature creep” or lose sight of the main goal of the new product. But, do take into account any input that will give your buyer ownership of the development without changing the fundamental goal. For example, maybe he feels like a different color would sell better, or a simple tweak to the user interface would make it better. If the final product bears his fingerprints, he will fight for you and be your biggest advocate when it comes to making decisions on new product placements.
Lastly, get your buyer’s input before any packaging specifications are finalized. Accommodating a retailers’ need for case pack dimensions, case quantities, special labeling or languages can prevent a lot of objections that can pop up at the last minute.
Tip #3: Show the buyer that you solved the problem
When you have a final product, or even a working prototype, be ready to physically demonstrate to your buyers that you have solved the problem that you set out to solve. Again, do not give into the temptation to provide the long list of features and intricate engineering details that you have built into your new product. Keep the sales pitch simple: “We set out to solve this problem, and look at how we did it (with your help).”
There are many ways to show the buyer that you have effectively solved a problem that no one else has. You can demonstrate your product side by side against your old products, or your competitors’ products. You can show the buyer your consumer research that illustrates how your new product is received and used by them. Video works great for this purpose. You should be able to put the product in the buyer’s hand and have him personally experience the improvement you made. If he is willing, take your buyer out into the field and show him your products in actual use.
Tip #4: Help the buyer do his job
Even if you are successful in convincing the buyer that there is a market need for your new product, sometimes that is not enough to guarantee placement. Come to the table anticipating what issues he may have and help him make his job easier. Since there are generally no empty shelves at your local warehouse store just waiting for a new product, your most important issue will be to address where this product goes in the store. Obviously your first approach will be to suggest a competitor’s product that can be replaced. But don’t be afraid to suggest replacing products in your own lineup.
Once the shelf position is determined, the retailer is going to want help implementing the addition. Maybe there are products that he will want you to buy back. Perhaps the retailer will need help in physically taking out old products and putting in new ones. Make sure you have anticipated this and present the buyer with a complete offer that includes all the help you are willing to provide up front.
Increasingly retailers are looking to set themselves apart from THEIR competitors by having exclusive products that can only be found on their shelves. Anticipate this request, and have a ready answer for them. Sometimes, this can be the right thing to do, especially if you have capacity constraints or other concerns. But usually you are going to want to get your new product placed on as many shelves as possible. Perhaps you can produce the same product with minor variations so each major retailer gets their own version. Maybe an exclusive promotion, pack-in or other offer is enough to give them the differentiation required.
Tip #5: Have a plan to ensure sell-through
Getting your new product on the shelf is only half the battle. If it doesn’t meet sell-through expectations, it will not be on the shelf for long. You can ensure sell-through by continuing with your crusade to solve one particular problem for your potential customers. Packaging, POP, signage, and promotions should all highlight the issue that you set out to solve. Consumers only spend a few short minutes, sometimes seconds, looking over products on the shelf. If yours does not scream why it is the best choice, you may not have a second opportunity to make your case.
If you were successful in getting your buyer or merchant to have some ownership feelings toward the success of your new product, he is more likely to favor you with off shelf placements, advertising and other promotions. Likewise, you can add to the urgency of coming out of the gate strong by providing a financial incentive, such as a rebate, for hitting certain sales targets. If it is allowed, these incentives can even go as deep as store level, or to individual employees. To assist in sell through, make sure associates on the floor know about your product. Instead of long, complicated PK sessions, provide a simple direct message that an associate can remember and pass on quickly to the consumer. When asked “Which product do I buy?” they should be able to quickly reply “This new product here is your best choice because it eliminates this problem”.
Make sure marketing that you do independently of the retailers coincides with your product’s main goal. Illustrate on your website how the new product solves the problem. If you decide to advertise the new product, keep the messaging simple and stick to the top reason your product should be selected. This single-minded approach may be tough for some consumer product companies to get used to. But if you have done your homework, executed your plan well and followed all of these tips, success is all but ensured.
How can Heinzeroth Marketing Group Help?
At Heinzeroth Marketing Group, we offer a range of services that help you execute every step of the new product development and launch plan outlined above. From helping you conduct consumer insights research that will discover your next product’s “reason for being”, to developing packaging, promotional vehicles, sales tools, product knowledge materials and more, we can do it all. Check out our case studies to see examples of how we have successfully launched many new products for our clients.
Also, before you give up on some of your mature products that have been successful in the past, you might consider going outside of your usual distribution. Download this free guide.