The New-Products Testing Dilemma

Our category-management expert helps us with a new-product conundrum
Scanning a Product

Q: What’s the best way to determine the viability of a new product?

A: Less than 3,000. That’s the average number of square feet c-store retailers have to work with in their stores. Not much, is it?

This presents a dilemma for the convenience channel: Just how much space should you dedicate to testing new products?

On one hand, we need to make the most from every inch of space. The more we can guarantee return from products, the better our performance. That’s why many c-stores take a hard line on new-product testing, saying it is too much risk: “Let other channels test and determine if customers want something. We will add it once it is proven.” This philosophy argues that we cannot afford underperforming items with our limited shelf space, even for short periods of time.

On the other hand, refreshing the offer with new and exciting products keeps our customers from getting bored and sinking into a routine. Did you know more than 60% of c-store shoppers know exactly where they will go in your store, and what they will get, before they even pull into a parking space? They are creatures of habit, which in the store can translate into tunnel vision. New products and services can play an important role in getting their attention and encouraging them to shop the store and maybe even add one more item to their basket.

Finding Balance

There’s no one correct answer for new-product testing—but there is a balance, one that varies. These questions will help determine the best one for you:

Is being early to market with new products part of your brand strategy?

A: Is it something you are known for, or wish to be known for, as part of your business strategy? Base this on facts, not just perceptions. Conduct research to understand what your target customers are looking for and what the competition is offering, and be realistic about your resources for building this reputation as a destination for new products.

Do you have a solid category-management approach and analytics for your existing retail offer?

A: Have a good grasp of the productivity of your core offer before getting into too many new-product tests.

How do you choose which products to test?

A: Being deliberate and methodical about what makes the cut will help your success rate. It will also build employee engagement and trust from your organization that only items with the most potential make the sales-floor test. If your approach to selecting new products to test is random, your results will be random, too!

Ieva Grimm, an industry insider for more than 15 years, spends her time working side by side with retailers in the convenience industry helping drive growth and profitability.

Have a question for our category-management expert? Email alewis@winsightmedia.com.