According to a recent Gartner report, by 2018, expert use of data/analytics will result in a 10% increase in the product success rate for a consumer goods manufacturer.
New products are critical to the ongoing success of the consumer goods industry.According to Nielsen, in its 2015 report on new product success, of more than 60,000 new SKUs introduced in Europe over the last years, just over half (55%) made it to 26 weeks, and only 24% lived to reach a full year.
So although every year, thousands of new products are introduced on grocery shelves, but sadly, very few reach a level of sales considered successful.
Nielsen goes on to state new product success is a combination of organization commitment, a disciplined product development process, and a comprehensive view of consumer preferences and behavior. So could more access to data around how consumer discover, interact, and buy products improve the odds of new product success?
Gartner 2015 survey suggests that BI/analytics was listed as the number one technology investment area for consumer goods CIOs. In fact, 43% of senior management see advanced analytics as critical to their organisations success. In the consumer goods industry, we are seeing more collaboration. We know that the consumer goods and retail industries have one of the richest data ecosystems second to the financial services industry. As partners start to share this data in meaningful and useful ways it is conceivable that greater use of this data could be applied to the problem of new product success.
Improving the odds of new product success represents significant financial gain for both consumer goods manufacturers and their retail channel partners. When a new product fails, it creates waste for the entire system, which cannot afford it, given the low growth in consumer products sales. Leveraging data and advanced analytics to identify ways to understand and predict consumer behaviour will become an increasing driver of new product and company success in the consumer goods industry.
Opportunities also exist to apply the analysis to improve the launch and post launch growth of the product. For example, ensuring product visibility in key growth retail channels – such as online.
Creating more compelling, data-supported cases for new products online will also increase the confidence of retailers that are making financial decisions about the best ways to leverage their offline shelf space.
- Work to identify the most pressing challenges associated with your company’s new product success rate. It is product, price, visibility?
- Share online insights with your retailers to gain preferred shelf placement offline