When we launch a new product or propose a customer initiative, we will take into account our customer’s lead-times to make sure that the SKU’s are accepted and listed with our customer. This is planned for our NPD project planning schedule and to ensure that stock is on shelf or available online ahead of any planned shopper and consumer support activity. However, once officially ‘listed’ and our launch begins, it can take anywhere between 4 – 24 weeks to physically get our new product into distribution.
Trade spend is usually agreed ahead of the execution of any new product or initiative. So, if we can get products onto shelves or available online sooner; we can generate weeks of incremental sales for the same agreed trade spend.
It is challenging to exceed customer supply expectations, especially when there are so many moving parts to our manufacturing, supply chain and sales and distribution functions. To increase our speed to market requires that our processes and capabilities can support our objectives and that our NPD, innovation, consumer, shopper and customer launch activities are aligned.
We can reduce and optimise our trade spend by increasing our speed to market and generating weeks of incremental sales for the same trade spend.
To think about how we might do this, we answer the following questions:
- How long does it take us to get new products or initiatives to market?
- How does our speed to market compare with competitors?
- What are the key customer barriers to improving our speed to market?
- Do we have a plan to overcome these barriers?
Fast distribution capabilities (once trade customer investment is already agreed pre-launch), means that we sell a higher volume for the same spend. This can add weeks of additional volumes which will in turn generate a more favourable return on our trade spend investment. Focusing on our speed to market capabilities not only enhances our net revenue but also positions our business, categories and brands competitively versus competitors.
How quickly do you get new products to shelf or available online?
Next in our ‘Top 10 Tips to Reduce Trade Spend’ series we think about the impact on trade spend investment when we focus on distribution depth and generate incremental sales from the same trade spend. If you have any questions or comments please get in touch.