Recently ParallelDots organized a webinar where we had a detailed discussion on how to Improve the Odds of Product Launch (NPD) Success with Image Recognition. The event was a great success with an audience of over 200 attendees from 5 continents. This blog consolidates the key points discussed during the webinar.
The guest speakers of the webinar were:
- Robert W. de Bruin, Ex-President and General Manager, Reckitt Benckiser Health
- May Kwah, Ex-Vice President Marketing, Unilever
- Neerja Sewak, Ex-Chief Operating Officer, Suntory
The webinar was moderated by Maks Mukundun, ParallelDots CEO for the South East Asia division.
WHY IS NPD IMPORTANT?
“New product development and launch is the lifeblood of a company”
Robert W. de Bruin.
In the fast-paced world today, the consumer needs and wants are evolving rapidly. It thus becomes a matter of staying relevant for companies to constantly bring innovation, launch new segments, refresh existing brands, and improve consumer engagement with the company. The market leaders act proactively by shaping consumer needs rather than playing a catching up game with their competitors. Thus, by providing a larger portfolio of products to choose from, they not only consolidate their position further as a brand of choice but acquire new customers as well.
Innovation is expensive!
Data on new product launches reveals a bitter truth with 75% of all new product launches in the Consumer Goods Industry failing within a year. Three-quarters of company investments not giving the desired ROI makes product innovations extremely expensive. However as discussed above, with the undeniable importance of NPD for FMCG companies, making this expense becomes a necessary evil.
WHY IS RETAIL EXECUTION IN NPD IMPORTANT?
Stakeholder Management is crucial.
Usually, we talk about the 6Ps of NPD: Product, Proposition, Pricing, Pack Size, Promotion, Place. Companies can still have 5 Ps under their control by doing in-depth research. “However, there is one P which is beyond everyone’s control - Place”, says May Kwah. NPD Teams can define a planogram but in reality, FMCG companies don’t own the place where that planogram has to be executed. Retailers have a big role to play in enabling execution and till the time they invest their trust in the product, it won’t find facings on the shelf. Hence, it is important to bring such stakeholders early into the pipeline.
During the development and launch phase, It is critical for Marketing, Sales, and Operations to establish effective collaboration. “Working from silos only brings more inefficiencies into the system. If brand managers don’t coordinate efforts among themselves, salesforce can quickly get overwhelmed with contradicting priorities and may end up de-prioritizing execution for the new product”, says Neerja Sewak. Furthermore, companies really need to ensure that their salesforce has an early buy-in for the new product. Ultimately it is the sales team that ensures execution and is responsible for realizing all the KPIs determined for Launch Success. If they are not confident about the product, on-ground execution can quickly fall apart.
Launch Assumptions are validated only during the execution phase
Kwah shared that many companies define the planogram several months before launch. By the time the launch date arrives, the on-shelf realities change so much that the planogram no longer seems to be relevant. Similarly, there are so many assumptions and projections that companies make during the process. A lot of these calls are informed by detailed research on existing scenarios. However, it is naive to believe that market scenario, consumer needs, competitor initiatives would remain constant all this while. Instead, the reality is far from it.
“Best products and marketing strategies fail if they are not executed properly" - Neerja Sewak
The real task is in the execution of the product and one can never be complacent about it. Consider a scenario when your competitor launches a new product almost at the same time as yours. Better retail execution from its end might see your product losing facings on the shelf, and ending up becoming a minor shareholder of the shelf. Such factors can really derail all preparations.
Companies that have complex categories with many SKUs create shelving patterns to manage them in-stores. For example, Reckitt Benckiser for its Infant Nutrition category arranges shelves in a manner that guides a new mother through the entire post-natal experience. This only highlights that perfect store plans and shelving plans are critical to the success of the NPD.
“NPD is one shot at success
- Maks Mukundan
A product has a short timeframe to prove its worth on the shelf and in retail execution time is money. When you place the product on the shelf, retailers want your product to move off the shelf. If they don't see the movement in 3 months they can delist it. Once that happens, for a brand the chance of coming back and reviving itself becomes only bleaker.
When the rubber hits the road that’s when it really matters.
Anyone who has been a part of new product development in FMCG companies understands how extensive this exercise is, spanning over many months and involving multiple organization functions to function together in sync. We have already explored that the low success rate of new products makes the entire process very expensive for companies. Thus, a lot rides on making them successful. These factors make these launches extremely high-pressure scenarios for those involved. We have seen how retail execution becomes an important part of NPD launch and ensuring its success. It is in these situations that gaps in execution are highlighted even more prominently and thus, retail execution becomes critical for the NPD execution.
HOW IS NPD RETAIL EXECUTION MONITORED TRADITIONALLY?
Traditional methods for monitoring execution have proved to be redundant and expensive. Collecting data manually is time consuming, inaccurate, and there is a risk of things falling through the gap. By the time the data reaches the management (almost after a month), it is too late and the data is insufficient for the management to intervene and quickly change implementations on-ground.
OVERCOMING THE LIMITATIONS OF TRADITIONAL METHODS WITH IMAGE RECOGNITION
All the speakers mentioned that ideally, they would need a solution that is less time consuming and easy to use for sales reps and merchandisers to capture data. The data must provide a real-time, visual representation of the shelf to make the reporting more fact-based and to enable quick and effective corrective actions.
In case of new product launch, being able to monitor the movement of the product on the shelf at least for the first 1 month of the launch on key outlets and high-velocity stores may result in highly effective execution. The live data from the shelf may even improve the gaps in planogram and in-store marketing initiatives.
They also agreed that some kind of automation enables in-store measurement to be captured within a few minutes would be ideal. This would ensure that the whole process becomes much faster and the reps are able to cover more stores in one day. It would be further beneficial if quick monitoring can translate to making the data available seamlessly to the decision-makers and ensuring that everyone from the reps to the store owner could be quickly instructed to fix the gaps in the execution strategy.
HOW SHELFWATCH HELPS IMPROVE YOUR NPD EXECUTION?
ParallelDots offers ShelfWatch as an image recognition solution for the FMCG/Retail Industry. The core methodology is as follows. Images are clicked using a handheld device either by the sales reps, the merchandiser or in some cases a third-party auditor. The images are then uploaded to the ShelfWatch cloud server for analysis. Within a few minutes, the sales reps get actionable insights to take the necessary corrective measures. This data also helps the management team measure their execution strategy and gauge how the products are performing on the shelf.
Deploying ShelfWatch is easy and hassle-free. Even for new launches, no extra effort is needed. With low training set-up time, one good quality image of the SKU is all it takes to set up ShelfWatch for product recognition. The training takes less than 48 hours to complete and then ShelfWatch is ready to provide insights from the real-world.
As NPDs are time-sensitive, ShelfWatch’s agile AI training methodology ensures that new SKUs are learned very fast and sales reps are instantly alerted. This is one aspect where Shelfwatch really shines out when compared to other Image Recognition solutions in the market. Most Image Recognition vendors will take 90–120 days setup time during which they collect and manually annotate data. This is an expensive and time-consuming process and does not scale well for new product launches or during peak promotions time.
Shelfwatch’s algorithm is trained in such a manner that it automatically analyzes the images to give out a comprehensive analysis involving KPIs like out-of-stock, share-of-shelf, planogram compliance, etc.
IMPORTANCE OF IMAGE RECOGNITION SOLUTION
Unless companies have the ability to monitor all elements of success coming to life on the shelf, they risk burning a lot of money on interventions that might not be working up front leaving very little to recoup and readjust down the line.
Robert rightly stated that there is a huge level of difference between average and great execution. Many companies don't give it the full focus that it deserves. He takes Reckitt Benckiser’s example to explain this further. Traditionally, RB has prided itself on retail execution ability. There were some high-margin, low-velocity brands that were not doing well in the market. RB made strategic acquisitions solely on its ability to execute better. For example, its execution of Dr. Scholl and Durex followed by supreme execution changed the fortunes for these brands.
Today, new age cutting edge technologies like Image Recognition are proving to be game-changers in retail execution providing a powerful tool for FMCG and Retail Industry to improve their top lines. More and more companies are adopting and embracing this change which is now proving to be inevitable.
Want to see how your own brand is performing on the shelves? Click here to schedule a free demo for ShelfWatch.