Jim Koppenhaver is the Director of Enterprise Solutions and Product Manager for SPINS Store-Level Data.
In our fourth installment of an ongoing Expert Lens series, we take a closer look at ways Store Level Data helps gauge the success of your product launch.
When you launch a new product, your team innovates, collaborates, and strategizes for months, if not years before it goes to market. You want excitement and consumer demand to be high by the time your product hits the shelves. That’s where marketing efforts and retail relationships come into play.
The early days of a product lunch are critical to assess how effective your preparations were. The more you know, the better you can respond and adjust your strategy. Store Level Data (SLD) can help you gauge the success of your product launch by focusing on 4 important metrics.
1. Observe Movement
When a product is new to the market, you suspect (and hope) it might show movement as shoppers begin to buy it. Store Level Data allows you to see how many units you have moved overall with that retailer and then by store location. If the movement in many locations is zero, you have a problem. Either your marketing was unsuccessful and hardly anyone was seeking out your product, or it was never in those stores to begin with.
When you see irregular behavior like that unexpected amount of movement (or lack of movement), you know to dig deeper. You can meet with your internal team or with the retailer to see the root of the problem. You might find out that your distribution had a glitch and you weren’t actually in the stores you assumed you were in. Either way, you’re now in a position to rectify the problem.
2. Monitor Supply
If, however, movement was strong and your product launch got off to a strong start, you could run into another problem—but a good problem. When you review store performance, you can spot instances of running out of products. Having such high demand for your product is better than having no demand, you still don’t want customers seeing empty shelves. Being out of stock means a loss of sales for you and the retail—and a chance for a customer to reach for a competitor’s product.
For example, assuming your projections for supply and demand were accurate, you probably know that stores will need to restock your product by the second week of the launch. When the second or third week arrive and some stores aren’t showing movement and sales are down or completely gone, there’s a good chance they’re out of stock. Regroup with them to understand what’s happening at these locations. If they ran out, let them know it’s time to place an order. Or if they have repeatedly run out of stock, dig through the numbers to show why they likely need to increase their order and have enough stock on hand.
3. Ensure Pricing Compliance
Part of your hard work leading up to the product launch includes pricing research. The pricing sweet appeals to customers, boosts your revenue, and gives retailers a fair profit. This pricing is often set after plenty of data analysis and focus groups. If SLD is showing you slow movement or some irregularity that signals the rollout is not going as planned, you can dig into the average price the product is being sold at. For example, if you based on the launch on a price of $2.00 per unit and you find out it’s being sold at $2.50. As you discovered in your pre-launch research, that price isn’t going to resonate with customers and it throws your plan off. Now you can discuss the situation with the retailer, get the agreed upon price point back in place, and see how it affects sales going forward.
4. Judge Promotion Performance
If your product launch coincides with a promotion strategy, as most launches do, you expect a certain level of return. You likely have an estimate for baseline sales volume (or sales volume on an average day) and sales volume during a promotional period. As you review SLD, you can monitor if sales are as high as you’d expect for this promotion—whether it’s a price reduction, coupon, or in-store display or demo. Is the sales lift what you expected? Is your volume unexpectedly high? Are promotions causing so many sales that you’re seeing an out-of-stock situation? Promotions play a significant role in a successful product launch, and SLD helps you stay on top of them with a store-by-store view.
Let Store Level Data Help Your Conversations
SLD allows you to review data across a retailer’s locations and act quickly, which is crucial during a product launch. Whether you’re focused on movement, supply, pricing, promotion, or all of the above, this data tells you what you need to know about your latest product offering. With this data on hand you can speak with your retail partners and get on the same page easily and quickly.
About Jim Koppenhaver
Jim has 30+ years of CPG industry experience beginning on the client-side (Kraft Foods, Marketing/Sales/Category Management) before crossing over to the “dark side” of information services (Spectra, IBM, IRI, Acxiom). His specific expertise in store-level data spans Spectra (store trade areas, profiling & targeting) to most recent sales and offering development at store-product-day provider RSi (now part of IRI).
Working with the SPINS retailer relationships team, Jim is building the next generation of applications across an expanded channel/network capability and working with existing clients to further harness the power of SLD for the benefit of manufacturers and retailers alike.