Product innovation – The key to retail success
In today’s competitive retail environment, product innovation is one of the most powerful tools available to attract customers, drive impulse purchases, and boost sales. Large consumer packaged goods (CPG) companies invest heavily in identifying trends, developing new products, and refreshing existing lines. As a store operator, your role is to leverage this investment with a clear, well-executed product innovation strategy.
Understanding Product Innovation
True breakthrough innovations are those that create entirely new product categories. These are relatively rare. A classic example is the launch of energy drinks in the mid-1980s, which introduced a completely new beverage segment.
Most “new” products today fall into the category of line extensions which are variations of existing items, often through new flavors, seasonal editions, or added features. For example:
- A popular chocolate bar in a limited-edition flavor.
- Potato chips with a bold, new seasoning blend.
Innovation can also come from packaging improvements such as easier-to-open containers, resealable packs, or portion-controlled sizes that make products more convenient and appealing.
Why Retailers Should Care
CPG manufacturers devote time, money, and market research to these innovations. By featuring them in your store, you can:
- Encourage trial purchases from curious customers.
- Drive impulse sales with eye-catching displays.
- Keep your store offering fresh and exciting.
How to Showcase Innovation in Your Store
1. Dedicated Innovation Displays
The most effective way to highlight new products is with a dedicated innovation rack in a high-traffic area which is ideally near the entrance or checkout. This draws immediate attention and maximizes exposure.
2. Endcaps
If space is tight, use endcaps to feature new items. Their prominent positioning naturally attracts customer interest.
3. Inline Placement
When innovation must be added to your regular shelf set, choose carefully. Remove lower performing SKUs to make room without sacrificing strong sellers.
Managing Limited-Time Offers (In/Out Products)
Some innovations are designed for limited-time availability to create urgency and excitement. These “In/Out” products are perfect for driving trial and repeat visits.
- If innovation items come with a freestanding merchandising unit, use it to expand your available display space.
- Reorder quickly if sales are strong so as not to miss the momentum.
- As the product’s end date approaches, discount the remaining stock to free up space for the next launch. Avoid letting odd remnants clutter your shelves.
Finding the Right Innovations for Your Store
Each year, the Convenience Industry Council of Canada (CICC) recognizes top innovations by category at its Industry Summit. This is an excellent source of ideas for what items should be included in your store stock. In addition, your manufacturer sales representatives can give you early insights into upcoming product launches, helping you plan your assortment and space allocation in advance.
The Bottom Line
New product innovation should be an integral part of your merchandising strategy. Some innovations will become instant hits, while others may fade away, but each offers an opportunity to keep your store dynamic and engaging.
By actively rotating new products, tracking performance, and presenting them in high-visibility locations, you can:
- Boost sales through impulse and trial purchases.
- Keep your store image fresh and relevant.
- Strengthen relationships with customers who know they can expect something new on each visit.
In short, managing product innovation effectively is not just good merchandising, it is a competitive advantage.
