IRI conference trumpets the benefits, pitfalls of new products
SAN FRANCISCO -- In case the 8 a.m. start time of Information Resources Inc.'s Summit 2006 yesterday was too early for any of the attendees, the opening general session started with a wakeup call: a video of IRI execs and grocery consultants noting that loyalty is down and the number of trips made to stores by consumers is down.
The goal of the conferencethe Reinventing CPG (consumer packaged goods) & Retail Summitof course, was to discover ways to reverse those trends. Traditional grocers lost 20 share points [to other channels of retail] over the [image-nocss] past decade, said IRI CEO Scott Klein. We need solutions to move innovation into real time.
Innovation was the operative word for both retailers and manufacturers during the morning full of speakers from IRI, large manufacturers and two powerhouse retailersWal-Mart and Safewaybut the discussion of innovation came with one major caveat. The consumer is tired of phony innovation, said Bob Connolly, the recently retired executive vice president of marketing and consumer communications for Wal-Mart. Connolly noted that some recent innovation in condiment packaging didn't equate to improved sales for retailers. That's not innovation, he said. That's just turning a ketchup bottle upside down.
Dr. Romesh Wadhwani, chairman of Symphony Technology Group, IRI's parent company, also offered a downside to what he called the proliferation of new products. We are living in a very confusing marketplace with too many choicesand not enough time, he said, noting that only 20% of the 100,000 products launched each year are successful. You can't bet on a growth plan with an 80% rate of failure. Simplicity is what the consumer is looking for.
Wadhwani also suggested retailers and manufacturers work smarter to make all the data that is now being collected actually add up to solutions. Our ability to actually use the datais, for all practical purposes, zero, he said. Once this mission is accomplished, Wadhwani said, he is confident the industry can develop what he calls the perfect store for the simple shopper.
This perfect store will rise out of four basic concepts:
Knowledge about the neighborhood. Knowledge of the competition. Design based on solutions (meals, wellness, etc.), rather than products. Shared information with manufacturers and wholesalers.
Connolly, whose talk was titled Time is the New Currency, agreed that simplicity will be important in CPG retailing in the future. There's plenty of room for new products that are innovative and provide solutions, he said. [But] the consumer is tired of force complexities. Speed is the only sustainable strategy.