Retail News Breaks
Study: Fraction of shoppers make or break new CPG products
May 21st, 2012
ST. PETERSBURG, Fla. – The success of a newly launched consumer package goods (CPG) product rests in the hands of just a tiny fraction of shoppers, a study by Catalina Marketing Corp. finds.
Catalina said Monday that the report, titled "New Products and the Pivotal Consumer," reveals that on average only 1.5% of shoppers accounts for 80% of the volume of new CPG products during the 12-month window after their introduction.
Examining 25 of the top product launches of 2010, the study also showed that for line extensions 63% of sales came from current brand buyers, of which nearly half of those sales cannibalized existing brand purchases.
"This report shows just how few consumers make or break even the most successful new CPG product launches. Of the 25 new products studied in this report, just 1 out of 67 shoppers made up the vast majority of sales," Todd Morris, executive vice president of brand development at Catalina, said in a statement. "With such small shopper concentrations driving the success of product launches, it's critical for a brand's advertising and promotions to reach the consumers who are most likely to try and repeat."
What's more, Catalina's study found that the small percentage of shoppers accounting for most of the sales of a new product was worth 64% more per capita than the average new brand trier. And even the biggest-selling new products studied relied on very small percentages of shoppers for sales. The two top-selling products tracked — an enhanced water beverage and a Greek yogurt — depended on just 1.4% and 2.7% of consumers, respectively, to drive 80% of their sales.
High-volume category buyers and, in the case of line extensions, high-volume brand buyers are much more likely to try new products than average shoppers, according to Catalina.
Top category buyers, who represented 80% of sales in the category before a new product launch, were 3.8 times more likely to try than the average shopper. For product line extensions, top brand buyers, who accounted for 80% of brand sales prior to a new product launch, were 5.8 times more likely to try an item than the average shopper.
Catalina added that top brand buyers were also 28% more likely to repeat the purchase than the average new buyer, and top category buyers were 19% more likely. The performance of top brand buyers, though, was impacted by the cannibalization of sales of current products within the brand. On average, existing brand buyers accounted for 63% of sales for the products tracked in the study. Yet 27% of all new product sales, or 42% of the purchases of existing brand buyers, actually cannibalized existing brand sales.
The study analyzed the two-year purchasing behavior of roughly 41 million U.S. consumers at about 20,000 stores.
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