Proto-type Research And Testing Versus The Retail Environment
Project FB – Update.
Since my last blog post about Project FB, concerning the “lowest cost viable product” with which to go and test the market, things have been moving in a positive direction. Our testing and proto-typing has led to changes in suppliers, improvements to our packaging, changes to pricing, and finally a set of products we have confidence will work in a retail environment.
But retail is a very different environment to the areas where most product testing takes place. We have done all of our market testing at local markets where you pay to spend a day listening and selling to customers but other routes we could have taken include more traditional market research including focus groups, or perhaps a larger scale test targeting one market segment with a full launch and evaluation. Whilst any method will give you answers it will also give you challenges.
We have recently been working with one retail outlet to see how our product would perform and what we needed to do to get the right rate of sale for the product to earn its place on shelf. Here are some insights for anyone facing similar challenges.
1) Rate of sale is the only measure that really counts. Your product must earn its space on shelf.
2) Having a relationship with the store manager is key. You must make sure everyone realises where the business is on the journey, what you are trying to achieve, and why it is worth it for both parties.
3) Make sure you have the flexibility to move your retail price – it is likely that pricing in the retail environment will need to be lower than it first appears, however do not sacrifice your premium without understanding the rationale behind any move.
4) The hardest thing about retail is that your product is stripped bare. You are not there to promote it, talk about it, and sell it. You much do everything to ensure a) the packaging does that job for you, b) you can maximise any opportunities in store to get your product noticed.
Since working with one retailer we have had to reduce our price point as customers felt the product to be too expensive. Our tests at markets would have suggested a higher price point was sustainable, but I think customers evaluation of goods changes depending on the environment they are in and the kind of shopping they are doing. We adjusted our packaging to simplify the messages and make the flavour names clearer. We added posters in store to get people’s attention.
All this is not enough. We are currently looking to add a sub-set of branded messages to a shelf strip and branded tray that will house our product and give even more impact on shelf.
On a busy shelf, full of products, how does my brand and product get noticed?
Getting a product right in retail is a critical success factor but I think any business regardless of size and financial resource can only maximise the retail opportunity by first understanding what is the right mix of price and promotional mechanics to generate the best rate of sale.
OK, so it is the end of my Common Purpose Matrix course. I have graduated and completed all the modules. I have been reflecting on the experience and trying to sum up what I have learnt, not from one specific event, but from the overall experience. In no particular order – here are the things that strike me!
There is much written about change. People who want us to change, things we want to change, and people perhaps we would like to change. Throughout the election campaign we seem to constantly be hearing about the need for change, the opportunity for change, and even when is the right time to change. Businesses are always grappling with change. As markets change businesses have to respond. Even the widest macro economic conditions are always changing, and these affect how markets behave, which in turn affects the way that organisations have to respond. Look at how cigarette companies have had to change their advertising and marketing over the last forty years – changing advertising styles, messages, and even markets. For a more current, more rapid example, look at how banks have had to change their products and branding to reflect both the products that they can actually offer and the reputation of their industry as a whole.