Launching new products can be both an art and a science, and can take on many forms. Some are flashy media events, such as Apple's Steve Jobs introducing the new iPhone. But for small wholesalers and retailers, product launches are a decidedly low key affair.
That does not mean smaller launches are not important; but small merchants are not usually introducing revolutionary devices dreamed up in the company's R&D labs. Small companies are typically introducing a new line of toys, clothing or other general merchandise items that they bought from a distributor, or they are launching a new grouping of products they already have, and the reseller is looking for a fresh, new way of enticing retailers to buy them. This story looks at the launching of new merchandise and new ways of packaging several products, and offers tips and examples from resellers that regularly introduce items.
Know The Market
It almost goes without saying that when a retailer is preparing to introduce a new item, they have to know a lot about the buyers they hope to attract. The way to do that is through constant communication with customers at every opportunity, whether on the phone while accepting orders, talking with them in the store or at flea markets, or at trade shows, or soliciting feedback from buyers on the company's website. Both retailers and wholesalers have to know whether their customers are going to like an item from the start, so this type of due diligence needs to be conducted constantly to stay ahead of trends.
Consider talking up a new product well before the launch to determine whether customers will buy it. This is the type of first hand information that can spare a company from being stuck with a storage room full of unsold inventory for which the merchant takes a loss. The more feedback a retailer collects early in the process, the easier it is to make modifications on how the company will sell the items.
"We are a wholesaler, so we are always mentioning new or upcoming products to our customers," said Kevin Chau, owner of K&A Party Supply & Flowers in Los Angeles. "We will send out emails, talk to customers on the phone or at trade shows, and we will place samples of new products in with their orders." Chau's company sells children's party favors and ornate silk flowers (under $10) at wholesale to convenience stores and other customers. A lot of the toys are licensed items that change often, so Chau is launching new products constantly.
He said that what tends to work best is still the most common. "It is a lot of word of mouth, especially in the party supply market. There are really only two importers who sell those items in the U.S., so it has become very competitive because all the wholesalers are buying from the same supplier. So we try to make sure we talk to our customers about new stuff all the time."
In addition to generating interest in new products through word of mouth, resellers also need to advertise. But with smaller budgets, the small merchant needs to be selective. Trade and consumer magazines still remain one of the best ways to let customers know about new items, and resellers should not enter that arena meekly. Conservative approaches in advertising often do not attract enough attention to the product. If the product is new and a merchant wants it to make an immediate splash, then be aggressive in marketing it. Not only does this help to launch the product, but it also shows customers that a company has confidence in that product.
At Oregon based Suncatcher Heaven, advertising in specific print trade magazines that are read by retailers has helped tremendously, said owner Alaura Syperda. Taking the time to plan a strategy will often result in a very successful launch, so merchants should consider all aspects of a publication in order to drum up buzz. That means getting enough publicity however a company can, usually by agreeing to be interviewed by trade magazines, websites or other publications.
One important strategy to get into magazines is with a well written press release. Small merchants might balk at this initially because they think that is stuff big companies do, but anyone can put together a press release that is newsworthy. In addition, for wholesalers trying to attract retail customers, a business can organize a small product launch at a trade show, which is something that can create additional buzz and interest in the item. If done right, and with a little luck, a wholesaler can generate a lot of interest and possibly free media coverage to supplement an advertising campaign.
Syperda was quick to add that in addition to traditional advertising outlets, she has also used the Internet. The company joined Wholesalecentral.com, the leading website for the general merchandise wholesale market, which has yielded, "Very solid leads."
In fact, it was a combination of the two, and talking it up at trade shows, that helped Suncatcher Heaven last fall to successfully launch a new guardian angel product made from crystals. Since November, the company has sold more than 4,000 of the items at $3.50 a piece at wholesale, making it one of their most sought after products. "We were able to catch onto something, it was the right theme, the right material and the right price. And by getting the word out, it has been a huge success for us," Syperda said.
The seven year old company almost did not have the opportunity to succeed. For its first four years, it was buying inventory from a distributor, which proved to be a bad move, in part because it could not truly give its customers what they wanted. Then about three years ago, they decided to begin manufacturing their products themselves. The move has paid off because it allowed Suncatcher Heaven to better customize its offerings. "We were able to see that pewter was out of fashion, that people wanted lighter items, items with more color, and we were able to quickly provide it to them," she said.
Email and Snail Mail
The next step a retailer should take when launching a new product is to announce the product through a mailing to the company's list of customers. These are buyers that already know and trust the business, so they are more likely to pay attention to new announcements.
Mailings these days can be electronic through emails, or the old fashioned way, using paper and postage, or both. Syperda said at least two or three times a year she makes sure to send out mailings to her 500 customers, alerting them to what is new. Suncatcher Heaven sells crystal and glass ornaments and jewelry beginning at under $3 per unit at wholesale.
"Paper and ink is still important, so we do traditional mailings," she said. "It is not scattershot, it is very specific. We do not have money that we can waste trying something that is not working. We might give it a year, but if it is not drawing interest to our new items, we move onto something else."
Mailings were vital when the company was launching its new line of jewelry, which was a major new market and direction for the company. Suncatcher Heaven highlighted the fact that the necklaces and bracelets are handmade to order, so that customers can have a specifically customized item.
"We are always coming up with new ideas of how to put together different shapes and colors. We make sure to let our buyers know that these items are new. We come up with new designs two to three times a week," she said.
Chau said that keeping buyers informed with mailings has helped the company grow its international business for party supplies. K&A primarily relies on emails, Chau said, partly because postage to mail out hundreds of packets would be too expensive. "By keeping customers informed, we have been able to generate more sales to stores in Australia and the U.K., which has been a good addition to our domestic business."
Both were quick to add that no matter what methods a small company uses to launch new products, make sure it is something a merchant loves selling. "You need to keep a sense of fun," Syperda said. "If you get stale, the product goes stale for the customer. They can see it."
K & A Party Supply & Flowers
209 Boyd Street
Los Angeles, CA 90013
Tel.: 888-900-7395 and 213-626-7395
1780 Deer Road
Tillamook, OR 97141
Tel.: 888-861-0248 and 503-842-5610
Tips to remember when launching new products:
- Know the target customer and market. By identifying the market, resellers can better target mailings and advertising. Start with the list of current customers and make sure they know about the new product. Proper targeting will yield greater success and allow a business to keep costs down.
- Plan the launch effort. Besides knowing which customers a business wants to reach, figure out the best ways to reach them. If customers usually stop by, then chat them up about what new products are on the horizon. If they use the web, keep the company's website updated and consider advertising or joining websites where customers may frequent.
- Create a little buzz in advance. Consider writing up press releases and distribute them to the trade publications in the market the company serves. Email customers early in the process with alerts about the product. Make contact with customers at trade shows and other events or functions.
- Give customers an offer they cannot refuse. Consider creating an offer or promotion in relation to the product to entice customers. By making attractive offers up front, such as discounts or free shipping, customers will take notice. Be sure to emphasize the benefits the offer will yield.
- Do not just advertise, publicize. Look for publications or news outlets that cover the industry and make yourself available for interviews. Be willing to talk about the company and the new product to anyone and everyone. This is also where press releases can come in handy. Learn some search engine optimization techniques to help improve your company's listing on search engines such as Google. Customers will not always find a specific company, so the business has to be everywhere it can in order to reach them.
- Stay on top of feedback. Just because a product had a successful launch does not mean the work is done. Constantly talk to customers about what they like and do not like about the product. Try to get some testimonials from satisfied buyers as soon as possible, and put them on the website or in the advertisements. Consider joining online social networks such as MySpace or Facebook to look for perspective customers. At all times, ask for feedback.
- Throw a party. Consider holding informal get togethers focusing on the product with clients at your location, at trade shows or at other functions. It is a great way for customers to remember a product. If the product warrants it, hold demonstrations, again to help customers to keep the product in mind.
- Make improvements to the product. This can be done by changing colors or how a company bundles the item with other products to create a theme. Look for ways to customize or accessorize the product, and consider creating a schedule to remember when to make changes or improvements to the item.
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