Use This Product Development Process To Launch Into Retailers
When you’re targeting retailers, it’s essential to be able to demonstrate to stockists a convincing product-market fit. Matt Hopkins, founder of IND!E Pop Up, gave us the lowdown on the product development process in our recent masterclass, Getting Ready For Retail. Here are the main takeaways.
The goal is to create a minimum viable product
As Matt says, the first key move to launching a great product is achieving a minimum viable product (MVP) as cheaply and quickly as possible. “It’s getting to that point of test, measure, learn, without actually bringing something to market”, he says.
Stage 1: Market research
Study your competition, current trends and your target customer, as this will equip you with the knowledge to find product-market fit. What’s more, when approaching retailers, you will be able to confidently demonstrate where you fit in the market and contemporary trend cycles.
It’s key to ‘micro-know’ your customer, as Matt says. Seek out honest feedback from anyone, from strangers to potential customers. Don’t be afraid to ask questions, even if the answers might not be what you want to hear. Ultimately, the long-term benefits will outweigh any sunken costs.
Step 2: Conceptualisation
Use your market research to build an idea that you’ve identified meets the market needs. Consider the design of the product, plus all the materials, suppliers, costs and contingencies involved in making it a reality.
Step 3: Prototype and testing
Develop a prototype and show it to people who you can trust to be honest with you. When developing his own products, Matt has asked people in the street for their feedback; don’t be afraid to get insights beyond your closest circle, as these are likely to be balanced and objective.
Step 4: Differentiation strategy
Based on your market research and prototype feedback, you can start to identify your unique sales proposition (USP) and understand how your product sets itself apart from the competition (which you will have, no matter how niche your product).
Matt uses the example of high street retailer Boots, which stocks a variety of competing brands. “They’ve got everything, but they’re looking for more of the those niche products that fill those smaller gaps.” Again, he says it’s crucial to ‘micro-know’ your customer at this stage, right down to their buying habits. Getting familiar with how your customer browses and shops will enable you to hone in on your USPs and where your product fits in the market.
Step 5: Wholesale pricing structure
A common issue for small businesses that sell direct to consumer is knowing how to price their products for wholesale. When you sell wholesale, you need to allow for margins for the retailer, which can be quite significant when it comes to larger stockists.
Matt recommends building in a 70% buffer (excluding VAT) into your pricing structure to allow for major retailer margins. Negotiating supplier costs and economies of scale can be difficult for small businesses, but be confident that, with a strong USP, you can command a higher RRP on the market.
Step 6: Continuous improvement and adaptation
Once you’ve launched your product, it’s now time to keep ensuring it’s fit for purpose. Be prepared to keep seeking feedback, watching market trends, and iterating. This will ensure your product stays relevant to the retailer and your customer.
Step 7: Branding and marketing
Finally, develop and solid branding and marketing strategy that underscores your USPs. Telling your unique story is key to differentiating your brand and generating demand.
