New products have often been described as the lifeblood of home improvement retailing. But it’s the behind-the-scenes sweat and elbow grease that generally determine the fate of a new item.
That’s one of the ideas advanced by a pair of hardware industry executives who spoke to HBSDealer about the path to new products. One of those executives, Memphis, Tenn.-based Orgill Senior VP of Purchasing Jeff Curler, said a process developed internally and called “Strategic Category Analysis” sets the stage for the introduction of new products into the Orgill warehouse. Under SCA. The process includes three review processes: productivity reviews, assortment reviews and line reviews.
“At the end of this process, implementation tools are used to develop communication to the Orgill Sales Force and the Orgill customers,” he said.
How often should retailers mix up their products? That depends, he says, but the general answer is: “as often as necessary.”
A new product pipeline is particularly important in categories where technology is front and center, or in areas of shifting codes and regulations. Examples of the first are home automation and LED lighting. Examples of the second include water heaters.
“The consumer expects their store of choice to be up to date on tech, fashion trends, and features,” Curler said. “If ‘last year’s model’ is priced the same with less relevance or features, the consumer is likely to move on to a purchasing option where their needs are better met,” Curler said.
The customer is regarded as a major driver of new product introductions. Customer demand is a powerful force in an industry that continually preaches customer-centricity. “Customer demand” was the leading vote getter in a recent HBSDealer poll that asked for the single biggest reason to introduce a product into a store’s merchandise mix.”
[Take the poll and see the results here.}
But customers often don’t know what new products are available. That’s where the vendors play an important role, according to Heath Ashenfelter, True Value Company VP and chief merchandising officer, who says the Chicago-based co-op has a number of ways to engage with its vendor community to bring new ideas to the fore.
True Value has stepped up its line-review program in recent years, and conducts about 50-to- 60 per year, the results of which appear in “Customized True Blue” assortments. The main goals of each line review are:
- Build assortments tailored to the local community
- Priced competitively at wholesale and retail
- Build a promotional calendar; and
- Eliminate excess inventory.
“One of the keys to any successful new product launch is signage, he said. “Getting new products into a high-traffic location, then very clearly promoting them with the right price.”
The process is bearing fruit. The co-op has sold 18,000 CTB assortments already for 2018. That’s more than the 17,000 sold for all of 2017. It’s also gaining traction with its new-item-endcap program, designed to push out new-to-market items every month. These are products that “we feel are the hottest and newest products in the market,” Ashenfelter said.