2009 will be a hallmark year for the paucity
of new items introduced by manufacturers.
However, Fabric Care is a category with numerous
new products and many of these deliver substantial
innovation to consumers.
In late
April the first of these laundry brands hit the
market, clamoring for space on key retail
shelves. Soon after both introductory trade
promotion and heavy consumer advertising began
pulsing through magazines and television.
Both were quite substantial outweighing most new
product introductions from recent years. The
product was first seen on the grocery shelf in
early May at least in outlets such as SUPERVALU
and Safeway.
ShelfSnap looked at the
launch of this product in the largest U.S.
retailers. We picked a point in time 4-5
weeks after the product launch and promotion in
feature advertisements. We ran a second wave
4 weeks later.
Performance
Wave
1 - June 2009:
- 31% of the stores did not stock the new
product at all.
- Of the stores that did handle the products,
the average store stocked only 4 of the 6 SKUs
in the brand.
- In total only 48% of the possible
distribution was in place 6 weeks after the
launch in these critical retailers.
- The average SKU had 1.2 facings per store.
- In two-thirds of the stores the products
were scattered across multiple
shelves.
Wave 2 - July 2009 - 4 Weeks
Later:
- All of the stores in these chains
handled the product.
- However, only 85% of the possible
distribution was in place at this 10 week point.
- The average facings per item had increased
to 1.3 with only 5 of the 6 SKUs in the brand on
the store shelf.
- The brand was always stocked on a single
shelf level.
- Over 40% of the stores had changed the
location of the brand from the prior
wave.
Tools
This
type of performance occurred in the largest
retailers in the U.S. All of the most
sophisticated traditional tracking and detection
tools are in-place and being used by the
retailers, broker and manufacturer. The
amount of scrutiny placed on this launch was very
significant. Somehow the tools were not up
to the task of clearly laying out to the trading
partners that compliance was compromised.
Impact
There is no
doubt that trial was impacted. The heavy
advertising designed to drive consumers to shelf
was launched prior to the product distribution in
more than 30% of the average chain's stores.
Some consumers may have picked it up at other
outlets. That hope leaves a great deal to
chance.
Trial was further hampered by the fact that
not all items were in the stores for both the
first and second wave of the audit. The
manufacturer had three distinct fragrances of the
product carefully designed to appeal to different
sets of customers. The degree that that
fragrance was unavailable in the customer's
regular store no doubt impacted sales.
Repeat sales were impacted by the
sluggish distribution and continued limited
distribution of SKUs.
What was
the sales impact experienced by the brand?
Numerous industry studies indicate substantial
sales increases in both trial and ongoing
performance of the brand if distribution is
completed ahead of or in tandem with advertising
and promotion. So a dramatic difference can
be ensured for doing the same field work a little
faster!
Many retailers are in
the process of substantial SKU
rationalizations. How does the negatively
impacted trial and repeat affect brand
sales? How would those sales, sub optimized
by the compromised compliance during introduction
be viewed by the retailer when determining
category keepers. Our visit to the category
in one of the stores already rationalized did not
find this new product on the shelf. A visit
to one store does not mean that the item was
dropped. However, how would the brand have
been evaluated had the compromised compliance been
reported and attended to last May or June?
In this case was the real cost to
the brand for the compromise in compliance not
just the forgone long term sales but the brand
itself?
