The Branded Pantry

2009 will be a hallmark year for the paucity of new items introduced by manufacturers.  However, Fabric Care is a category with numerous new products and many of these deliver substantial innovation to consumers.In late April the first of these laundry brands hit the market, clamoring for space on key retail shelves.  Soon after both introductory trade promotion and heavy consumer advertising began pulsing through magazines and television.  Both were quite substantial outweighing most new product introductions from recent years.  The product was first seen on the grocery shelf in early May at least in outlets such as SUPERVALU and Safeway.ShelfSnap looked at the launch of this product in the largest U.S. retailers.  We picked a point in time 4-5 weeks after the product launch and promotion in feature advertisements.  We ran a second wave 4 weeks later.

PerformanceWave 1 - June 2009:

• 31% of the stores did not stock the new product at all. 
• Of the stores that did handle the products, the average store stocked only 4 of the 6 SKUs in the brand. 
• In total only 48% of the possible distribution was in place 6 weeks after the launch in these critical retailers. 
• The average SKU had 1.2 facings per store.
• In two-thirds of the stores the products were scattered across multiple shelves.

Wave 2 - July 2009 - 4 Weeks Later: 

•  All of the stores in these chains handled the product.
• However, only 85% of the possible distribution was in place at this 10 week point.
• The average facings per item had increased to 1.3 with only 5 of the 6 SKUs in the brand on the store shelf.
• The brand was always stocked on a single shelf level.
• Over 40% of the stores had changed the location of the brand from the prior wave.

Tools This type of performance occurred in the largest retailers in the U.S.  All of the most sophisticated traditional tracking and detection tools are in-place and being used by the retailers, broker and manufacturer.  The amount of scrutiny placed on this launch was very significant.  Somehow the tools were not up to the task of clearly laying out to the trading partners that compliance was compromised.ImpactThere is no doubt that trial was impacted.  The heavy advertising designed to drive consumers to shelf was launched prior to the product distribution in more than 30% of the average chain’s stores.  Some consumers may have picked it up at other outlets.  That hope leaves a great deal to chance. Trial was further hampered by the fact that not all items were in the stores for both the first and second wave of the audit.  The manufacturer had three distinct fragrances of the product carefully designed to appeal to different sets of customers.  The degree that that fragrance was unavailable in the customer’s regular store no doubt impacted sales.Repeat sales were impacted by the sluggish distribution and continued limited distribution of SKUs.What was the sales impact experienced by the brand?  Numerous industry studies indicate substantial sales increases in both trial and ongoing performance of the brand if distribution is completed ahead of or in tandem with advertising and promotion.  So a dramatic difference can be ensured for doing the same field work a little faster!Many retailers are in the process of substantial SKU rationalizations.  How does the negatively impacted trial and repeat affect brand sales?  How would those sales, sub optimized by the compromised compliance during introduction be viewed by the retailer when determining category keepers.  Our visit to the category in one of the stores already rationalized did not find this new product on the shelf.  A visit to one store does not mean that the item was dropped.  However, how would the brand have been evaluated had the compromised compliance been reported and attended to last May or June?In this case was the real cost to the brand for the compromise in compliance not just the forgone long term sales but the brand itself?