But in the fast-paced retail world, it seems quite the opposite is happening. In fact, rather than reining back on what can only be described as a period of industry hedonism, it appears that the purveyors of new product development (NPD) are planning to accelerate innovation to keep consumers spending.
Could it be that the credit crunch is actually helping to accelerate business in the competitive retail industry? Surely not would be the likely response, but the results of a study just out seem to point in that very direction.
In spite of the gloomy financial forecast, 58 per cent of leading UK brand managers are planning to launch the same number if not more products as in 2007.
All good news for consumers, who will have more choice than ever on the supermarket shelves. But what exactly is behind the strategy that so vehemently bucks the national trend? In difficult financial times, all companies need to make adjustments.
Even the top performers will cut back on costs here and there, yet at the same time, will transfer their efforts to focus on and develop other aspects of their business.
For retailers, this means attracting new customers as well as keeping existing ones. A simple task, perhaps, but in these tough economic times, consumers need something to keep them coming back for more.
As a regular shopper, I know I certainly don’t want to see the same old products displayed week after week. A constant flow of innovation is essential to capture attention and retain custom.
Of course, there are ways of doing this without going through the whole NPD rigmarole every time – variations on packaging for example, reinvigorate a tired-looking product – but often this is not enough.
Yes, consumers reduce their spending during a downturn, so technically the pace should slow, but the majority of shoppers are just as, if not more demanding than ever. In spite of the ever-tightening purse strings, we still want the same quality and quantity as before.
So we have established that the consumers are holding the trump card with the retailers. But within the industry, the stores that are making serious demands on suppliers – in their desperate attempts to retain customer loyalty – are creating a palpable and inescapable sense of competition.
Not only are they ruthless when it comes to creativity, they are also driving businesses down on a range of issues including cost, speed-to-market and environmental factors.
Only organisations that excel in all of these areas are likely to succeed. And in these uncertain times, it is more important than ever before, to get it right.
A difficult task some might say, but not an impossible one. By channelling key resources and financial investment into ongoing NPD, companies can secure their future in this dynamic and ever-changing market.
Now is certainly not the time to bury heads in the sand and wait for the period to pass. Brand managers with a brave attitude to creative development and an innate understanding of consumer wants and needs are the ones that will have long-term success. Now and always.
