New products should drive a significant portion of your store’s revenue, but success launching them is as much of an art as a science. It goes far beyond simply stocking your shelves. It requires a deliberate strategy, careful planning and consistent execution.
Why Are New Products Important?
New products are more than just additions to your shelves—they are critical drivers of growth. According to McKinsey and Associates, more than 25 percent of total revenue and profits across industries stem from the successful launch of new products. For your store, they are an annuity—as many consumers as you can get to embrace new items, they’ll come back for more!
While specific benchmarks can vary, aim for new products to contribute 20-30 percent of your annual revenue goal. While this may seem like a lot, it is critical as this helps to overcome lost customers to other retailers, supply chain issues in core items and much more.
Tracking the performance of new products is vital. By monitoring metrics such as units sold per store per week (UPSPW), revenue generated per store per week ($PSPW), and profit per inch of shelf space, you can identify which products are meeting expectations and which may need re-evaluation.
When you on-board new products into your computer systems, wherever possible, tag them as a new product with the month and year of launch, that way, when you run reports, you can segment between your core items and new innovations. You should always track performance of this separately.
Selecting the Right New Products
Your store’s shelf space is valuable real estate, and every new product must justify its presence. Ask yourself, “how is this product going to earn a space on my shelf?”
Talk to your sales rep about the product’s marketing plan, what the brand is doing on social media, and how they will drive traffic into your store. These should be as much of the discussion as to what makes the product unique from a formulation perspective. Brands that actively invest in social media, advertising campaigns, or influencer partnerships typically have built-in consumer demand, increasing their likelihood of success.
In addition, now is a good time to review the brand’s MAP policy. Not only should they have one, ask how they are enforcing that policy.
However, keep in mind that brands making significant marketing investments often carry higher prices or provide fewer discounts due to their need for greater margins. Just like your store, these brands require margin dollars to fund marketing efforts. You may be taking on a higher priced product, but you’re partnering with a brand that is paying their fair share to drive demand, rather than riding on the coattails of others.
On the other hand, lower-priced or commodity brands often lack robust marketing support and rely heavily on aggressive introductory offers or free fills. If a free fill is the primary launch strategy, it’s often a sign the brand isn’t sufficiently investing in broader consumer demand generation.
Curating your product selection is also critical. Avoid overwhelming customers with multiple, nearly identical products. For example, within magnesium supplements, choose products that address stress, sleep, cognitive function and physical motion alongside a general magnesium product, rather than having 10 products that all essentially have the same magnesium. Each product should service a unique consumer. Audit every shelf for where you have redundancy.
Strategic Product Placement
Where you position new products in your store significantly influences their sales success. High-traffic areas such as entry points, checkout counters and strategically placed endcaps are ideal. Endcaps should face the busiest sections of your store, maximizing visibility.
Your store should have a dedicated endcap for new items. Put it in the highest visibility area of the store. This can serve as proving grounds, giving these products a chance to demonstrate performance before earning permanent shelf space.
In addition, shelf violators for “New” become critical once an item makes its way into the core set.
Leveraging Effective Displays
Displays remain one of your most powerful retail tools. Although keeping your store neat and aesthetically pleasing is important, overly restrictive clean-floor policies can limit your sales potential. Larger retailers often use endcaps, power wings (sides of endcaps), and feature displays to boost product visibility.
Even if brand-provided cardboard displays don’t match your store’s look, consider building custom display areas that incorporate brand-supplied marketing materials and signage. Ensure these displays are prominently positioned in your highest-traffic areas. Visibility is essential to maximizing their effectiveness, encouraging customer interaction and boosting sales.
Managing Underperforming Products
Not every new product will be a hit, and it’s important to have a clear strategy for managing underperformers. First, assess the key performance indicators (KPIs) you’ve established to identify products that aren’t meeting expectations. Consider bundling these products with bestsellers to create value-driven offers that encourage trial.
When phasing out a product, communicate clearly with your team to ensure consistent messaging across all customer touchpoints. Train staff on how to handle inquiries about discontinued items and suggest suitable alternatives.
Consider setting a category review schedule for your store. Throughout the year, at least once, ideally twice, you should deep dive into the data for the various categories and audit the performance of the products on shelf against the aforementioned KPIs.
Setting Expectations With Brand Sales Reps
Your brand sales representatives can be powerful allies in ensuring the success of new product launches, but it’s essential to set clear expectations upfront. From the outset, communicate and document your expectations regarding marketing support, promotional offers and merchandising assets. What resources can they provide to help you drive product awareness and sales? Are there specific promotional funds available? Will they support in-store demos or provide digital assets for online marketing?
Additionally, establish a clear follow-up schedule to assess performance and make necessary adjustments. Regular communication with your rep can keep both parties aligned and focused on shared goals. Request specific data, such as sales lift from promotions.
Also, consider negotiating performance incentives for your team for brands that will support this. If the product meets specific sales targets, are there additional promotional or co-op dollars available? Setting these expectations early helps ensure that your brand rep is actively invested in the product’s success, aligning their efforts with your store’s revenue goals.
Creating Your Playbook
Just like an airplane pilot has a manual to follow, develop a standardized product launch playbook outlining essential steps to follow every time you introduce a new product. Assign a specific staff member as the “product champion” for each launch, responsible for driving and coordinating the marketing and promotional activities. Offering extra incentives or performance-based spiffs to your product champion and relevant staff can further boost motivation and sales success.
Your launch strategy should cover various marketing tactics, including product sampling, in-store demos, comprehensive staff training, educational signage, social media promotions, email campaigns, bag stuffers and regular launch events. Given the potentially high volume of new products each month, establish a master launch schedule to manage your promotional efforts strategically. Aim to prominently feature each new product for at least one month, with longer periods (up to three months) often necessary to fully establish product visibility and customer awareness.
Maximizing Customer Acquisition
Your goal with every product launch is to attract and retain new customers, driving sustained growth. Strategically launched new products should represent a significant portion of your annual revenue growth.
Loyalty programs play a pivotal role here, allowing you to track customer behavior, personalize promotions and encourage repeat purchases. Your aim should be converting new customers into loyal repeat buyers by encouraging at least three purchases. By the third purchase, shopping at your store often becomes habitual, ensuring ongoing revenue. It also is your best defense against a customer slipping to another retailer or online.
In this spirit, think about how you will track this goal of repeat purchase. Consider a new-product specific punch card program with just three punches. Incentives could be discounts, but they could also be giveaways. As an example, the first time they buy a new product they get a free bag with your store logo (free advertising!), the second time they buy the new product, they get a free pillbox (reminds them of your store in the bathroom!), the third time they buy, they get a free t-shirt or baseball cap (more free advertising!)
Measuring Success: Key Performance Indicators
Tracking product performance accurately helps you optimize inventory and ensure consistent profitability. Key metrics to monitor include units sold per store per week (UPSPW), revenue generated per store per week ($PSPW), and profit earned per inch of shelf space. These performance indicators reveal how effectively each product contributes to your store’s success.
Set clear category-specific thresholds to guide your decision-making, particularly for determining when products deserve permanent placement on main shelves after proving successful on promotional endcaps. Consistently meeting or exceeding these benchmarks indicates products that deserve long-term shelf presence, while underperforming items should be reviewed and potentially phased out.
The Sum of All Parts
Maximizing the impact of a new product launch involves more than standalone tactics; it requires coordinated strategies that work together to amplify visibility and drive sales. Think of this as creating synergy, where a promotion, product feature and display align to create a comprehensive launch strategy.
For instance, consider a product launch that includes a targeted promotion, a featured product placement, and a dedicated display. By aligning these elements, you not only increase the product’s visibility but also reinforce messaging across multiple customer touchpoints. For example, a new digestive health product might be highlighted in a special endcap display, supported by a “Buy One, Get One 50 percent Off” promotion, and featured prominently in email marketing and social media posts.
Strategic cross-promotions and bundling can effectively increase product visibility and average transaction values. Bundling new products with established bestsellers can introduce customers to the new item while capitalizing on existing customer loyalty. For example, consider creating themed product sets like a “Digestive Health Starter Kit” that includes a new probiotic supplement, a bestselling digestive enzyme and a fiber product.
Final Thoughts
Launching new products effectively can dramatically improve your store’s growth trajectory, customer satisfaction and market presence. By strategically selecting products, placing them prominently, leveraging impactful displays, executing structured launches, motivating your staff and diligently tracking performance metrics, you can ensure every new product launch contributes significantly to your ongoing success.VR
Ryan Sensenbrenner leads marketing at Enzymedica, Inc. With extensive expertise in various marketing fields, including retail and e-commerce, he places a special emphasis on branding and customer centricity. Sensenbrenner has collaborated with retailers nationwide, enhancing their marketing strategies to boost revenue and brand recognition in their communities. He served a 10-year tenure on SENPA’s Board of Directors, holds a bachelor’s degree in journalism from Grand Valley State University, and is an Executive Scholar and Certified Chief Marketing Officer from Northwestern University’s Kellogg School of Business.
English