A “Pivotal” 1.5% Of Shoppers Decide Fate Of New CPG Products

May 23, 2012

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | CPG & FMCG | Data-driven | Retail & E-Commerce

catalinacannibalize585.jpgJust 1.5% or 1 in 67 shoppers, accounted for 80% of volume during a 12-month window following their introduction, according to [pdf] a new report published by Catalina, the Florida-based consumer-driven marketing firm. The report explores the purchasing behavior of more than 41 million US consumers and shows that a tiny fraction of shoppers determines the success of new consumer packaged goods (CPG) product launches.The study examined 25 of the top product launches of 2010, and found that for line extensions, 63% of sales came from existing brand buyers, of which almost half of those sales cannibalized existing brand purchases.

“This report shows just how few consumers make or break even the most successful new CPG product launches,” said Todd Morris, executive vice president of brand development for Catalina. “With such small shopper concentrations (1.5%) driving the success of product launches, it’s critical for a brand’s advertising and promotions to reach the consumers who are most likely to try and repeat.”

This tiny percentage of shoppers that accounted for most sales was worth 64% more per capita than the average new brand trier. Even the biggest selling new products in the study depended on extremely small percentages of shoppers for sales. The two top selling products tracked in the study, an enhanced water beverage and a Greek yogurt, depended on just 1.4% and 2.7% of consumers, respectively, to drive 80% of their sales.

Finding the Most Likely Buyers

High-volume category buyers and, in the case of line extensions, high-volume brand buyers are much more likely to try new products than average shoppers. Top category buyers, who accounted for 80% of sales in the category prior to a new product launch, were 3.8 times more likely to try than the average shopper. For product line extensions, top brand buyers, who accounted for 80% of brand sales prior to a new product launch, were 5.8 times more likely to try than the average shopper.

Top brand buyers were also 28% more likely to repeat the purchase than the average new buyer, while top category buyers were 19% more likely. The performance of top brand buyers, however, was tempered by cannibalization of sales of existing products within the brand. On average, existing brand buyers accounted for 63% of sales for the products tracked in the study. However, 27% of all new product sales, or 42% of the purchases of existing brand buyers, actually cannibalized existing brand sales.

About the Data: Using privacy-protected anonymous and aggregated data, Catalina analyzed the two-year purchasing behavior of approximately 41 million US consumers at approximately 20,000 stores, representing a portion of the Catalina Network. All consumer purchase data came from consistent shoppers who shopped at least twice in every eight-week interval within the retail chains during all study periods. Trial, repeat, and cannibalization metrics were time-aligned to 52 weeks prior and 52 weeks following product launch in the Catalina network.

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