Convenience retailers of all sizes agree that new products are crucial to build basket spend and to create interest in store. But you’ll only reap the benefits if you really get behind launches as they happen
Research by IRI has shown that there are fewer new products hitting shelves, retailers are promoting npd less frequently and success rates in new product launches have fallen from 2010/11 to 2013/15 (success is defined as selling faster than the average in your sector). Yet new product launches have the potential to increase basket spend, give you a better range than your competitors and encourage consumers to trade up.
Bringing new products into your store is key for Ian Millar at Sandwiches@Millars. “NPD (new product development) is definitely important. It generates interest. People don’t want to come into your store and see the same thing day after day. So I will always try new products and they are often successful at creating interest.”
The benefits of new products can’t be ignored, according to Harris Aslam, managing director of Eros Retail in Fife, especially when the product is within the confectionery category.
“NPD brings great opportunities for promotions and deals and provides opportunities for communication with customers as you can suggest the new product and ask for their thoughts. It also gives customers an excuse to pick up an extra item, as they want to try something new. With confectionery, as it’s a treat, a new product will do particularly well because people are more likely to see it as a permissible treat if they are trying something new and interesting.”
So given the positives, why aren’t all retailers backing new lines? Harris, whose company runs four Nisa stores in Scotland, points out that dealing with new products does come with challenges and extra work, as they won’t always sell themselves. He will often try to work directly with the supplier in order to sell the product effectively - and this can make or break a line.
“Just recently we re-introduced Percol coffee in our store. We had it in a couple of years ago and it didn’t sell, so we discontinued it. But the company recently had some NPD so we decided to do a bit of work with them for the launch in our store. We carried out tasting sessions, put it on promotion and gave it a prominent space. Loads of customers bought jars and one customer even bought a case, they loved it so much! It just goes to show the difference a bit of joint working and promotional activity can make.”
Harris also recently worked with Mondelez to introduce the new Green & Black’s range to his store. It helped him to set up a special display, which he says has worked well.
“Working with the supplier is extremely helpful with promotional activity as it allows you to take the product to the next level. If you want to do something like ‘buy a coffee jar and get a mug free’, for example, you can only do that with the help of the supplier.”
David Smith, of Smiths Corner Store, in Louth, Lincolnshire, agrees, adding that simply a bit of special positioning in store can make a huge difference. He says he will give any NPD ‘a try’, especially if it is within the confectionery, biscuits or soft drinks categories. He says these items usually sell well and are easy to put on the till area, which helps them catch the shopper’s eye.
One recent winner for David has been McVitie’s Nibbles, and he’s not alone. McVitie’s Nibbles have been United Biscuits’ biggest NPD for 2016 after being supported by more than £4m in media investment, including TV advertising.
Sat Deo, who runs three Costcutter stores in Yorkshire, says a big marketing push makes all the difference when it comes to sales in his store, adding that Walkers Bugles has been very popular thanks to its big TV advertising campaign.
“For us, the bigger brands with the big marketing spends are important, but that’s because our customers are usually in a rush and doing a quick shop, not browsing, so they are much less likely to pay attention to niche items or products from very small companies that they’ve never seen before.”
Harris says the only time he will put a new product straight on shelf without a special display is if there is a large marketing push around the product - then he knows customers will come in looking for the item especially. He cites Mondelez’s Dairy Milk Marvellous Creations chocolate bars as an example of a bar which went straight onto shelf and still sold very well, as it had such a big marketing push behind it - worth £7m. Harris recommends retailers ask Mondelez for merchandising advice, saying it the company has been very helpful to him with previous launches.
Finding out if there is a big marketing push behind the product is just one of a list of criteria Harry Goraya, of Rosherville Post Office, Gravesend, Kent, looks into when discussing new products with suppliers.
“The first thing I need to know is, will this product get additional promotion, through TV or press or elsewhere? I also want to know am I getting it prior to launch elsewhere, such as in the multiples? What in-store activity will the supplier help to provide? Can the supplier help me to make this launch better than elsewhere in order to engage with my community? Did they do a retailer forum prior to launch to ensure this is something c-store retailers need?”
Harry was particularly impressed when Burtons Biscuits was about to introduce its Fish and Chips crisps in 2014 as the supplier came and discussed the product with him, explained how they planned to launch, asked for his thoughts and acted on his feedback.
“They then provided an in-store demonstration and helped with theming the section where the crisps were sited. This helped to make me feel more enthusiastic about promoting the product because I had been consulted. When you’re seeing up to five sales reps a week trying to sell you a new product, they have to do something special to make you feel enthusiastic about their product.
“It’s also very helpful if they launch in the convenience sector before launching in supermarkets, as so often it is the other way round and that tends to make us less enthusiastic about it.”
Of course, all retailers have their own style. David says he “doesn’t particularly” use POS in terms of stickers on shelves. “We think it looks messy, but we do use stands, as long as they are no higher than one metre, otherwise they get in the way and obscure shoppers’ view. Ideally, something 50cm x 50cm and one metre in height is perfect for putting by the till.”
Some retailers avoid POS altogether. Tess Flower runs the quirky The Village Shop, in Upper Dicker, East Sussex, which combines regular goods with unusual local antiques, gifts and art. POS material does not fit in with the style so she tends to write her own, personalised POS onto chalkboards. “We don’t like to have big branded signs around the shop so I will try the products and if I particularly like one then I will write ‘Tess likes this, try it tonight with a gin and tonic’, or something like that. It just gives it a bit of personality.”
She does stick to the trustworthy tool of putting new products onto the counter, though, and finds this works particularly well when selling a sweet treat which looks very tasty. And she will often make a display with her own signage and decorations. “Of course, I will always try to create attractive displays of products as anything which looks attractive in store will catch the shopper’s eye. It’s very important to me to have a welcoming store which looks appealing to people passing by.”
Simply Fresh retailer Simon Biddle, of Biddles Convenience Store, in Redditch, also likes to provide a unique offer in his store and he stocks about 150 lines from local suppliers. Needless to say, these don’t come with big marketing budgets, but they garner great sales.
“When it comes to new products it’s important to have a strong USP and be different. Obviously, we sell the big branded stuff, but we like to be unique and the local products are often better quality, fresh and not mass produced.
“Customers will come in specifically for the local products and if a local company brings out a new product, it will nearly always sell well. Sometimes the companies will be able to supply some shelf-barkers or posters, but if they can’t then I will make some myself.”
So while a new product with a big marketing push is usually a safe bet and worth stocking, it is also worth trying unique products from smaller, more local companies, even if just to provide a point of difference. Whatever the product, seek out the supplier to get a good understanding of the launch and ask for their help with your display. Try using the supplied promotional material or even create your own for a more personal touch. One point all retailers agree on - stock new products and promote them in store in order to keep your offer interesting and fresh.
New product launches in decline
The number of new products being launched into UK retail stores is falling significantly, according to an IRI report.
IRI’s 2016 New Product study showed that 13% fewer new branded items and 26% fewer new private label items were launched in 2015, compared with 2013, a move partly due to multiples more ‘aggressively’ rationalising their ranges, manufacturers’ budgetary pressures and squeezed margins.
But while on the face of it this may seem like bad news for c-stores, it could be an opportunity for smaller retailers. With supermarkets decreasing the number of SKUs in the confectionery category by 11.5% and in the biscuits category by 11.4%, this could offer potential for c-store retailers to stock confectionery and biscuit products that aren’t stocked in the big supermarkets.
Stephen Lampard, head of convenience at IRI, points out that NPD promos work well in convenience compared with supermarkets, because convenience shoppers are more predisposed to try something on impulse in c-stores instead of being focused on the big shop, plus the small format means the display is harder to miss.
The IRI report revealed a 29% rise in the number of new branded launches in the sugar confectionery category and a 9% rise in the number of new branded launches in the biscuits category in 2015, vs 2014.