Breaking through the sea of sameness
There were more than 2,400 health, beauty and wellness items launched in 2015. And if historical percentages play out, of those less than 10% will emerge as successful brands with “staying power.”
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Hamacher Resource Group compiled a comprehensive analysis of the top 44 brands that broke through and resonated on store shelves in 2015 based on sales and distribution within chain and independent pharmacies. And GlaxoSmithKline’s Flonase headlines that list, posting first-year sales of more than $331.9 million across total U.S. multi-outlets, according to IRI figures for the 52 weeks ended Feb. 21.
Of course, there are several common characteristics that each of these emerging brands share, noted Dave Wendland, VP strategic relations at Hamacher Resource Group. “For brick-and-mortar retailers, space is at a premium, and newly introduced brands have to demonstrate increased sales lift, greater category traffic and/or market basket incrementality,” he said. “Within our proprietary Concept-through-Commercialization methodology, HRG has identified approximately 25 steps in a product readiness process,” he said.
Some of the common traits among emerging brands include:
Carefully constructed rationale around how and why the product satisfies an unmet need;
Packaging that effectively communicates product benefits while capturing attention;
Shelf placement recommendations that are relevant and category building;
Balanced marketing and promotional plans that combine traditional media with social and digital; and
Distribution strategies that are realistic and achievable.
The real challenge, however, is how to identify which brands may emerge from the pack as real winners when they’re still in launch stage. It’s not easy, given the sheer number of challenges facing new-to-market brands today.
For starters, to emerge from “a world of sameness,” brands need to be different, noted Dan Mack, managing director of the Mack Elevation Forum. “Retailers more than ever are looking for brand partners that truly are originals,” he said. “Winning brands prior to launch invest upfront building brand awareness, creating community and authentic buzz.”
A lack of competitive intelligence can become a major blind spot for emerging brands, said Scott Hanslip, SVP at Competitive Promotion Report. “Most marketers don’t have the basic foundation on how to optimize their everyday pricing and margin assumptions,” he said. Hanslip identified three rules to help emerging brands rise to the top:
Know your competition better than your own brand;
Identify brand roles based on margin contribution; and
Position your brand with a price advantage vs. competition in order to gain trial.
“[MarketTrack’s] Shopper Insight Survey in dicates [consumers] will switch brands at a rate of 80% if they are presented with a promotion on a competing brand,” agreed Traci Gregorski, SVP marketing at MarketTrack. “The fact is, in consumers’ minds, [advertising and promotion is] all messaging that is influencing their perception of the brand and their propensity to buy it.”
“Go-to-market rules have changed a lot over the last five years with the emergence of omnichannel,” added Brian Owens, director retail insights at Kantar Retail. “Before, brands were required to invest millions of dollars in above-the-line marketing to reach their target consumer. Today, shoppers are less influenced by mainstream messaging and more interested in digital marketing that targets more emotional needs. You see this phenomenon play out in specialty beauty retailers like Ulta and Sephora [that] are reallocating incremental space to brands that tell an emotional story and stand for something beyond the functional needs products provide,” he said.
There’s also value in being authentic, added Melinda Olson, CEO of Earth Mama Angel Baby. “Five years ago, the words ‘organic’ and ‘natural’ actually meant something,” she said. “We rely on constantly updated research to uphold our agreement with consumers to provide products that deliver what they promise. It’s important to be transparent.”
However, without that preconditioned brand awareness, or another trendy hook like “organic,” the cost in getting a new product on the shelf can be formidable, said Kurt Jetta, CEO of TABS Analytics. “[That cost] either comes in the form of heavy slotting/consignment or big merchandising/fixturing costs if you are a beauty company,” he said. “Many brands fail because they expect the retailer to be the brand manager and nurture the new brand.”
For new-to-market companies, successfully navigating that first shelf placement can be formidable. “In today’s retail CPG arena in order to have any chance ... your product must be disruptive, innovative and able to expand, not replace, existing category business,” noted David Biernbaum, master broker of national sales, marketing and business development for David Biernbaum & Assoc.