Success Stories

Managing innovation

By George Anastasopolous

Customers want what's new

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Welcome to the third and final instalment of Convenience U for YOU, your taste of what's to come at The 2008 Convenience U CARWACS Show on March 18th and 19th in Toronto and May 22nd and 23rd in Calgary. Let's jump right in: which new products are right for your store and how do you manage them for best results?

Managing innovation is integral, but why? Why new products?

Your customers want and expect innovation. Innovative new products turn more quickly and can provide a huge competitive edge. Innovation can be critical for driving growth. If you attended Convenience U in 2007, you learned that innovation represents up to 30% of confectionery sales and that 550 new items fuelled 8% beverage growth.

Think about that for a second.

So you decide to go for it, buy a few things, merchandise them on the shelf or in the cooler, price them competitively, promote them, and hope they sell. But don't think it's that simple; for every change you make by adding new products, there's something at stake to consider:

  • More selection (and possibly more clutter) makes your customers' choice more complex.
  • Disrupting your planogram can demand a reduction in shelf space for your big sellers, making your customers work harder to find what they want.
  • You merchandise and display aggressively to create awareness, but it takes display space away from your better sellers.
  • Promote new products to get awareness, trial, and SALES, but those efforts possibly sacrifice promotional activity from your better sellers.
  • Invest cash and increase your inventory, but that could reduce your TURNS.
  • You hope innovation sells and makes satisfactory profits, but it could reduce your profits and GMROI (and if it doesn't sell, how do you get rid of it?).
  • Time spent educating yourself and staff on a new product's features, its benefits for shoppers, the types of consumers targeted, and how and why they might buy it.
  • Might cannibalize sales of other similar products and affect their sales, profits, TURNS and GMROI.
  • Add administrative costs to account for, order and inventory new products.

Innovation is a BIG DEAL! It's critical for a c-store's business, but there's risk and trade-off. Your goal is to offer new products that appeal to your customers and potential customers, grow your overall sales and profits, and warrant your investment.


Not all innovation is created equal. Consider the following:

  • Does it have brand power? If there's strong consumer awareness, trial and demand.
  • Does it offer consumer value? Some unique point of difference appealing to consumers.
  • Will it grow total category? Sales and/or profits.
  • Does it have a vendor making marketing investment? Advertising and promoting it.


  • Set minimum sales and profit targets for new products in at least your big five categories. Scrutinize each new product offered against the potential of reaching those targets and be disciplined in selection.
  • Welcome new products more readily in categories where innovation drives growth, such as confectionery, snacks, beverages and lottery.
  • If you're going to do it, get in early and do it BIG.
  • Track sales and profit results from new products for at least six months. If they haven't reached these targets, or have fallen below, consider phasing out and discontinuing.
  • Consider the practice of "one-in-one-out," discontinuing a product before bringing in a new one. Regularly and ruthlessly discontinue slow sellers and lower-profit items.
  • Ask your full service distributor rep and suppliers' reps for help to meet your targets and information to inform selection.


Deciding on the right Assortment of new products is only the beginning. You'll need effective Merchandising, and you'll have to be competitively Priced, well Promoted, and have People who talk it up with your customers. We'll have many useful M.A.P.P.P. tips for managing innovation at Convenience U. See you soon! GEORGE ANASTASOPOULOS is president of Leadership Fundamentals Inc, a packaged goods, distribution and retail consulting firm helping clients better understand, adopt and practise the principles of MAPPP. George can be reached at 905.469.8887, or

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