The goods on product development

Jun 01, 2006 9:30 PM  By

Most marketers understand that their merchandise is what sets them apart from the competition. But as finding new product becomes increasingly challenging, how do you ensure unique merchandise? Product development is the answer for most merchants. The ACCM session “Delving into Product Development,” moderated by Multichannel Merchant executive editor Melissa Dowling, provided some of the whys and hows of doing it.

For starters, you’ll have to try merchandising without trade shows — or at least, limit your dependency on them, said panelist Jerry Knoll, president of Kansas City, MO-based consultancy Knollink Communications Co. One problem with merchandise shows is that everybody else is there too, all looking at the same products. What’s more, most vendors at the major gift shows are on a brick-and-mortar schedule, which allows for shorter lead times.

You still need vendors as a resource, of course. But rather than go to the shows, Knoll suggested visiting them at their showrooms before or after a big show, or have them come to you to discuss new product ideas.

The Internet can also be a good source for product: Knoll cited Greatrep.com, Farcountries.com, and Wholesalecentral.com as a few online sources for gift items. And blogs are a good way to stay tuned in to new products and sources, he added. Not that you have to give up on trade shows altogether, Knoll said. In fact, arts and craft shows can often spark products and ideas, as can shows outside of your core industry.

A proprietary product development program is your best bet for ensuring product exclusivity, said panelist Jacqueline Daigle, president of Oakland, CA-based consultancy Creative Merchandising Solutions. What’s more, developing your own products can reduce your cost of goods by 40%. Daigle pointed out that you can ease into a program by negotiating product exclusives with vendors.

In trying to make a hot product your own, Daigle advised, “don’t knock off, knock up.” Try making a product more upscale — or more downmarket — to better appeal to your audience. She cited a set of green dinnerware carried by high-end gifts merchant Gumps and a similar set, though at a much lower price point, sold by Target.

Gifts and gadgets cataloger/retailer Brookstone has had a relationship with Temper-pedic Swedish sleep systems, she noted, “and they’re still going strong” with the line by adding pillows and travel acessories.

Panelist Jennifer Ellsworth, vice president of product development, sales, and marketing for Aurora, NY-based ceramics manufacturer/merchant MacKenzie-Childs, detailed how Pleasant Rowland, founder of American Girl (and current owner of MacKenzie-Childs), was inspired to launch her company of educational books and dolls. Ellsworth, who used to work for American Girl, noted that Rowland pressed on with her idea for the company — even though participants in focus groups conducted outside Chicago said they would never pay $75 for a doll-and-book set.

Ellsworth also revealed one of MacKenzie-Childs’s best-selling items: the Mrs. Powers Dinner & Door Bell. The company’s creative director found the item — an elaborate iron bell a rural wife would ring to call in her family from the farm — in upstate New York. MacKenzie-Childs’s product development team re-created the item, and not only did it become a number-one seller, Ellsworth said, “it showed us we could start looking outside of painted majolica [pottery] for new products.”