Quick Stats

Quick Stats

    You are here

    New Study Finds Many Challenges to New Product Success

    Less than 1 percent of shoppers drive sales volume.

    ST. PETERSBURG, Fla. — New product launches in the consumer packaged goods (CPG) industry fail more often than they succeed. And for the ones that are successful, maintaining that popularity in subsequent years is difficult, revealed a new study from Catalina.

    Consumer concentration of less than 1 percent drives the vast majority of volume for most new CPG products, according to the report, entitled “New Product Tradition Through Targeted Shopper Interaction: How New Product Success Hinges on Small Concentration of Shoppers.” The survey found that just 0.7 percent, or one in 143 shoppers, accounted for 80 percent of volume for the average new product studied.

    Of the 50 new food and beverage products analyzed, just eight had shopper concentrations of more than 1 percent driving 80 percent of volume, and only one had a concentration above 2 percent.

    “The percentage of households that make or break the success of new CPG products is very small,” said Marla Thompson, senior vice president of U.S. strategy for St. Petersburg-based Catalina. “Our study makes it clear that it is critical for brands and retailers to find likely triers and repeat buyers, while also engaging the right shoppers over time to sustain repeat purchasing. It also shows that purchase-based targeting can be a cornerstone of successful new product launches.”

    The study also demonstrated a major distribution challenge for new products. It took 28 weeks for the average new product to reach 75 percent of its peak distribution in stores tracked in the study. This long delay creates significant inefficiencies for national mass media campaigns, the Catalina study highlighted.

    Even if a new CPG product is successful, the “sophomore jinx” can be a huge problem, too, the study concluded. Even top-selling items in their first year sometimes fail to survive their sophomore year.

    According to Catalina, only 11 percent of shoppers who tried a new product within the first six months of launch remained engaged after 52 weeks. Twenty-four percent of those initially trying the product made at least one repeat purchase in the first six months, but more than half of those did not try the product again in the following six months.

    “Our research demonstrates that retaining buyers quickly becomes at least as important as customer acquisition to the success of new products,” said Thompson. “Finding and engaging the consumers most likely to both try and repeat, and then delivering the right incentives and messages to efficiently sustain purchasing over time, should be a core strategy for growth.”

    For the study, digital media provider Catalina analyzed 45 million consistent shoppers across 11,000 U.S. stores.

    Related Content

    Related Content