It sounds harsh, but it is something that every brand manager, marketer and CEO needs to hear. Over the past two years in establishing our program I have heard it all, every objection from “Thanks but we’re good”, to “It’s just not right for us” to “Happy to support if it is free”.
When I first started this project it was based on years of dealing with independents and hearing their stories, about the lack of information and service they were getting in relation to new products for their business.
When I was consulting I remember going to a café to observe their operation and what peaked my interest was a small space in the corner of their business dedicated to convenience products. As I walked around the small space I noticed that all of the products were brands that I had never heard of before. There were no house brand names or market leaders, and in my 30 something years of dealing with these very brands, I questioned why have I not heard of these new lines before.
This one chance encounter has paved the way for what is now Stock Box, as I set out to truly understand why 95% of all new products fail. If the statistic is to be believed, then are we really saying that 95% of all new products are duds, and if this is, the case then why would you bother investing in new product development in the face of this overwhelming statistic?
How can new product fail when consumer research indicates that more product choice in-store is what customers are looking for, and our very own member feedback continually encourages us to keep up the good work, to keep sending new and interesting products to range, and to just keep going.
I have seen it all, from the generation of leads from the program that suppliers have never followed-up on, to poorly managed product launches, to distributors saying that there is just not enough volume for us to warrant ranging, to suppliers openly telling me that this just created more work for them.
So much effort goes into the development of brands yet once it goes to market there is almost a hand’s off approach when it comes to the greater independent marketplace. So we decided to put this to the test recently, and selected twenty of the top ranked companies within the FMCG sector, asking our members one simple question.
“How often would you hear from these companies or their representatives?”
This was a voluntary survey of our retail members across P&C, Mixed Business, Café & Takeaway, Newsagents and Independent Grocery, with damming results.
Across the board more than half of respondents indicated that they had never heard from these companies or their representatives in the past 12 months, and almost a third of respondents indicated that they did not carry any of their products at all. Only 20% of respondents indicated that they ranged these brands and had received some remote level of service and support.
Yet the justification from these companies remains defiant, with comments like “Well this is no surprise as we do not focus on these businesses”
“Stop falling in love with your brands, because the market does not care!”
At a recent trade event, I had a conversation with the owner of an amazing product the only problem was that they thought it was amazing too! After a brief discussion and explanation about what we do, they responded with “We also have our own field force, so we would not want to create cross-over” Really!
In the face of damming evidence from our survey of major brands with vastly greater field teams that theirs, they were under the impression that “Things were all good, thanks!”
People in your organisation who are in love with your brands or who think that everything is good, will ultimately be your downfall, because happy people change nothing and challenge nothing. No one leaves a job because they are happy, so it stands to reason that change can only occur if there is a level of unhappiness with someone or something.
Nothing changes, if nothing changes and in an industry where change is the only constant you better hope you have people in your business willing to change.
In my experience, the reason new product fails is less about the product, and more about the people who are reluctant to change, unwilling to upset the status quo, and uncertain of doing anything new for fear of how it may impact on them personally. I have come to realise that product fails because of people.
With imminent change and new competition on the horizon, I have no doubt that those same people will point to these factors as reasons for declining sales, when in reality there is no such thing as competition, until YOU create it either through ignorance, arrogance or neglect.
Thanks for reading
Craig Matthews is the MD of Stock Box, with over 30 years industry experience in retail development, specialising in independent retail programs.