Retailers nationwide still value the importance of providing shoppers with innovative options, reports Stagnito Media's 2012 New Products Survey.
Tried-and-true products will always have their place at retail, but shoppers continue to seek out new innovations — and retailers know it, according to Stagnito Media's 2012 New Products Survey.
In fact, 60 percent of respondents said they brought in more new products in 2011 than in 2010. To that end, 36.8 percent of survey participants saw 5 percent to 9 percent of their sales come from new product alone. In general, half of the respondents cited an increase in new product sales compared with 2010, and 38 percent saw neither a bump nor a decline in new product sales during that time.
In other words, new products are still driving business at retail.
In considering whether to add new products to the mix, 94.3 percent cited customer demand as the catalyst. Meanwhile, 69.8 percent of survey respondents acknowledged that offering new products is key to maintaining a competitive advantage over other stores.
While retailers had a favorable response to interest in new products, they made clear that there remains some room for improvement on the part of the manufacturers responsible for research and development. While 48 percent of respondents said vendors were doing a "good" job of product development, just 27.8 percent used the words "very good," and only 3.7 percent rated manufacturers as "excellent" in this area.
Just how involved are retailers in the R&D process? According to survey results, 10 percent collaborated closely with manufacturers on projects. For example, respondents reported participating in coupon drops; doing in-store sampling and product demos, among other promotions; and working with partners to build a customer advisory board. Others mentioned getting ideas from competitors and going to suppliers with these suggestions, including private label offerings, as well as keeping an open dialogue with brokers and vendors about new products that might be available to them specifically, given their target audiences.
As such, 53 percent of retailers said they gave more promotional attention to new products versus existing in-store items; 39 percent said they gave both at least the same amount of play. When it comes to store brands, 66.7 percent of respondents said they devote more efforts toward private label than they do national brands - proof of the staying power of store brands. In fact, only 4.1 percent of survey respondents don't participate in private label.
When asked what trends are affecting their businesses most, retailers relayed a number of factors, the most common being the state of the economy, demand for single-serve/grab-and-go/ready-to-eat grocery items, healthy living, fuel prices, demand for lower prices, and — you guessed it — private label growth. Others were:
- Best-by dating or sell-by dating ("Our business is severely hampered by short sell-by dates, as the item is dead after that random date," one retailer noted. "Even vinegar, a preservative, has date codes.")
- Cost of goods
- Food stamps
- Customer service ("Customers first is the No. 1 policy," one retailer asserted.)
- The shop-local movement ("The customers want product stories that are relevant to the local economy," one retailer said. "They want to know that they are supporting neighbors.")
- Lower traffic counts and more exacting consumer purchasing patterns