New Products Set the Pace in HBC/GM

May 14, 2007

By George Anderson

It’s long been said that new products are the lifeblood of the retail business and 2006 was no exception. A host of innovative, high quality products were rolled out to meet specific consumer needs in health and beauty care (HBC) as well as general merchandise (GM) categories.

According to IRI’s 2006 New Product Pacesetters report, “customized beauty and personal care was a big theme” among items introduced to the market. The categories that saw the most activity in terms of customized solutions were cosmetics, shampoo, hair conditioner, dog food, soap, skin care, hair styling gel/mousse, toothbrushes and related dental items, hand and body lotions and hair spray.

For consumers, enhanced performance and customize solutions went hand-in-hand as is evident when looking at IRI’s top pacesetters for last year. According to IRI, two-thirds of the products that it identified as pacesetters offered “enhanced consumer experiences through new technologies or improved effectiveness.”

Gillette had two items on the list, Fusion and Venus brand products, coming in at number one and number 10.

Other enhanced products making the list were Zantac 150 (quicker acting antacid tablets), Tide with Febreze (removes odors), Tide Coldwater (reduces energy costs) and Huggies Pull-Ups with Wetness Liner (to assist in potty training).

This last item points to an opportunity for retailers. According to the Pacesetters report, “expect to see more innovation around baby and toddler care as the country is in the midst of a new baby boom.”

recommends retailers take a number of actions to more effectively capture new
product opportunities including:

  • Establishing a system to identify emerging
    trends earlier;
  • Identifying consumer markets/niches that offer a high potential
    for growth;
  • Evaluating if there is a fit between a new product and the consumers
    served by a retailer;
  • Benchmarking rollouts against historical successes and
  • Identifying sourcing opportunities to bring in branded and private
    label items not carried in competitors’ stores;
  • Determining assortments on
    a localized basis;
  • Supporting rollout with in-store media;
  • Erecting multiple displays and leveraging
    sampling to induce trial;
  • Measuring performance including the impact on the
    rest of the category.

Discussion Questions: What consumer-need opportunities do you see opening up and what does that mean for HBC/GM manufacturers and retailers? What recommendations do you have for retailers looking to leverage the power of new product introductions?

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5 Comments on "New Products Set the Pace in HBC/GM"

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Mark Lilien
15 years 3 days ago

Information Resources New Products Pacesetters Report measures success by sales dollars. The report does not account for cannibalization or profitability. Most CPG manufacturers want to improve market share, not just replace their own products’ sales. Will the new Coke flavor make headway against the competition or will it just induce Coke drinkers to switch flavors? And since the IRI report doesn’t discuss profitability, it isn’t clear that beating a sales benchmark might simply be a function of unsustainably high ad and trade promotion spending rather than consumer adoption. It’s easier to reach $100 million sales if you spend $200 million in promotion than if you spend $20 million. But which can be sustained?

David Biernbaum
15 years 2 days ago
This topic hits home because I am presently working closely on a niche oral health line called TheraBreath and PerioTherapy, by Dr. Harold Katz. We’ve seen that consumers will literally choose a store and make a special trip for the sole purpose of purchasing these brands. Once in the store, they are likely to purchase several other items from the Dr. Harold Katz line, and several other unrelated high margin niche products in the same stores ranging from upscale cosmetics to custom beauty supplies, and premium items of many types. Niche brands like these, when merchandised all together in one custom section – including the breath freshening rinse, gel/paste, the extinguisher spray, PerioTherapy, gum, mints, floss, etc. – will result in multiple purchases that will average out to $360 per year in retail sales, per each niche minded consumer. In the case of Dr. Katz, the special product benefits are better known to 1.5 million loyal consumers than even to IRI, or any tracking firm, but retailers carrying items like these know well that price… Read more »
Richard J. George, Ph.D.
15 years 2 days ago

As far as retailers are concerned, a couple of IRI’s comments should resonate well. First, match these new products to the profile of your target market. Second, private label in these emerging product categories represents a real opportunity to realize a differential advantage in the marketplace. The key to the latter is to value differential advantage over margin. Margins will follow if retailers are able to demonstrate to their target markets that the retailer’s offerings match their needs and lifestyles.

Raymond D. Jones
Raymond D. Jones
15 years 2 days ago
While the IRI report may be based strictly on sales, it is a good indication of the influence that new products have on the market. Also, it is important to remember that new products are key not only to expanding sales, but to maintaining the market by replacing the sales of declining items over time. This is particularly true in categories such as HBC which are heavily influenced by fashion and social trends. It is important to keep abreast of the the trends with new products that suit the times. A key trend today is customization to the individual. Often, this can be accomplished through a system that assesses individual needs and designs a product from available ingredients. It is interesting that if you want to paint a room a particular color, you can choice from swatches and have the specific shade produced at the hardware store. But often we are expected to all choose from the same assortment of HBC products regardless of our age, skin type, complexion, or hair color. This would seem… Read more »
Art Williams
Art Williams
15 years 2 days ago

One of the larger opportunities will be creating new products that will appeal to the baby boomers as they reach retirement age. They will not only have the disposable income but are also very health conscious.


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