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Thinking Inside the Box

New Products Require New Retailer Strategy

November 26, 2012
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I am writing this month’s column while in Europe and thinking about the volcanic eruptions taking place around the world.

Not the ash variety. No, the new SKU variety.

The past five years has seen an unprecedented period of the launch of new products in the private label arena. New designs, new brands and sub brands, new tiers in Value (first price) as well and NBE and Premium not to mention Healthy, Gluten Free, Fair Trade, etc.

In one country, we see growth of premium, as well as in first price. In another country, it’s all about hard discount and imitating the Aldi model. In another, it’s imitating Trader Joe’s, or Costco. There is no “one size fits all,” even though the macroeconomic position of many continents really is depressed.

What does this all mean for retailers and manufacturers as they struggle to launch new products, get them to market faster, reduce costs, increase volumes, change packaging, create new brands and at the same time, try to strengthen partnership and relationships throughout the supply chain?

I was in a room with a bunch of manufacturers and retailers this week. All are engaged in launching new products at an increasing pace. I asked them about their project management approach in their collaborative efforts. Their adoption of business process improvement to provide transparency across the organization to all stage and gate tracking. The challenge of keeping tight and consistent access to a single version of “the truth” increasingly is daunting as the complexity of our new product development needs expand.

The bottom line with this group was that the majority were not working with retailers that were using sophisticated “lifecycle management” software. I asked about retailers getting access to specific ingredients being used across multiple products. The general answer was “good luck with that!”

This all tells me that now is the time every retailer needs a strategy for analyzing their business processes as related to managing the innovation pipeline of new products. As retailers seek (and do they ever need to!) new types of partnerships with their suppliers, as they press their teams to speed up launches, they need new types of support. Working better, faster and smarter cannot be achieved with extra effort. It can only be achieved by a strategic plan towards introducing new technology.
 

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