BEAUTY CARE

Catalina report: Targeted marketing boosts new product success

BY Michael Johnsen

ST. PETERSBURG, Fla. — CPG marketers bringing a new product to consumers don't need to break the bank on a national advertising campaign. According to a new study from Catalina, they just need to idenfity and market to the small number of early adopters.
 
Catalina's research, released Wednesday, found that just 0.7%, or 1 in 143 shoppers, accounted for 80% of volume for the average new product studied. Of the 50 new food and beverage products analyzed, only eight had shopper concentrations of more than 1% driving 80% of volume, and only one had a concentration above 2%. 
 
In addition, the study uncovered extremely low retention rates for most new products,  just 11% of customers who tried a product in the first six months of a launch were still engaged with a new item after one year.
 
“The percentage of households that make or break the success of new CPG products is very small,” stated Marla Thompson, SVP of U.S. strategy for Catalina. “Our study makes it clear that it is critical for brands and retailers to find likely triers and continue engaging them over time to sustain repeat purchasing. It also shows that purchase-based targeting can be a cornerstone of successful new product launches.”
 
According to the report, engaging shoppers based on predictive modeling of their likelihood to buy can result in trial rates that are five times more than the natural trial rate. The study also demonstrated a major distribution challenge for new products. It took 28 weeks for the average new product to reach 75% of its peak distribution in stores tracked in the study. This long delay creates significant inefficiencies for national mass media campaigns. 
 
Sustaining revenue growth for new products in the second year after a launch is frequently a challenge for the CPG industry. Even top-selling new items sometimes fail to survive their sophomore year. One major issue affecting those failures is a lack of repeat purchase, according to the report. The study finds that for the average new CPG product, just 11% of shoppers who tried the new item in the first six months of a launch remained engaged after 52 weeks. As many as 24% of initial triers made at least one repeat purchase in the first six months, but more than half of those did not try 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,” Thompson said. “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.”
 
Catalina's report also underscored inefficiencies in national marketing campaigns for new products due to uneven distribution. On average, the new products tracked in the study took 28 weeks, more than half of their first year in stores, to reach mass availability. Mass availability was defined as reaching 75% of a product's highest distribution.
 
This long wait for availability often results in either wasted media spend or lost opportunity, according to the report. For example, many shoppers may be hit with initial ads and promotions with no ability to purchase the product in their store. Conversely, a new product may have little or no advertising or promotional support while it sits on store shelves for months, as the brand manager waits for further distribution. As a result, only a small percentage of likely triers become aware of the product.
 
For product line extensions, winning over existing brand franchise buyers can be an important opportunity for growth. Across all of the line extensions studied for this report, an average of 76% of brand franchise buyers did not even try the new item. Yet those who did spent an average of four times more than other franchise buyers.  
 
Catalina looked at the 50 top-selling food and beverage products identified in the latest IRI New Product Pacesetter report. To be eligible, products needed to complete their first 12 months of sales in 2014.  For this study, Catalina analyzed the behavior of some 45 million consistent shoppers across 11,000 U.S. stores, which are a subset of Catalina's total U.S. network. A consistent shopper was defined as someone that shops at least two times every eight weeks for seven consecutive eight-week periods. 
keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
BEAUTY CARE

ADA awards Hello toothpastes Seal of Acceptance

BY DSN STAFF

Montclair, N.J. — The American Dental Association last week awarded a Seal of Acceptance to the new blue raspberry, green apple and bubblegum toothpastes for kids, from Hello Products’s Naturally Friendly oral care line.

The seal acknowledges that all of Hello’s toothpastes meet the ADA’s guidelines for toothpastes that contain fluoride, and represents a sign of excellence in oral care products.

“We don’t believe you should have to compromise when it comes to products for your family,” Craig Dubitsky, the company’s CEO, said. “All of our toothpastes leave you feeling clean, polished and fresh without unnecessary artificial ingredients, plus the added bonus of amazing taste … And now that the entire Hello paste collection has the ADA Seal, there’s no question that it’s effective for the whole family.”

The toothpastes launched exclusively at select Target locations and Target.com, and are set to expand in retail distribution. 

The three kids’ toothpastes and the new peach mango mint flavor for adults are the latest additions to Hello’s portfolio of its original three adult toothpastes, which received a Seal of Acceptance last year.

Hello’s line of toothpastes is vegan and does not contain artificial flavors, artificial sweeteners, dyes, preservatives, triclosan, or microbeads. The company instead sweetens the kids’ toothpastes with xylitol and stevia.  

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
BEAUTY CARE

NeoStrata introduces new Exuviance peels

BY DSN STAFF

PRINCETON, N.J. — NeoStrata Company announced two new additions to its peel collection on Tuesday.

The anti-aging dermatology company and creator of the original glycolic acid peel introduced the Exuviance Firm-NG6 Non-Acid Peel and the Exuviance Daily Acne Peel.

Exuviance Firm-NG6 Non-Acid Peel contains a 6% concentration of NeoGlucosamine, which facilitates cell renewal and exfoliation to plump skin. The peel evens the skin tone and diminishes the appearance of dark spots, according to the company. Consumers can apply the peel to skin and remove after five to 10 minutes, without rinsing.

"Many people are intimidated by peels because of their acid content," Barbara Green, VP of Clinical Affairs at NeoStrata, said. "Exuviance Firm-NG6 Non-Acid Peel alleviates this worry with a safe, acid-free formula that is gentle enough for all skin types. It's a safe and effective way to reduce the noticeable signs of aging on a daily basis."

The Exuviance Daily Acne Peel contains salicylic acid to control breakouts, exfoliate skin, and reduce pore size and oiliness. It features CitraFill, an anti-aging ingredient that targets collagen and skin matrix for firming and line-smoothing benefits, the company said. 

"Pores expand as they become clogged with dirt and sebum, causing blemishes and an uneven texture," Green said. "Exuviance Daily Acne Peel helps keep pores clean and skin clear, fostering a smoother, more refined complexion."

Exuviance Firm-NG6 Non-Acid Peel and Exuviance Daily Acne Peel Exfoliating Anti-Acne Blemish Pads retail for $68 and $35, respectively, and will be available in August at Exuviance.com, ULTA and select prestige beauty retailers nationwide.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?