Roughly two-thirds of the 50,000 products launched across industries annually fail within two years in part because they do not have the visibility necessary to capture consumers’ attention or the history to have established consumers’ trust, explained Rich Fryling, who joined Product of the Year as managing director last year.
“When consumers shop they spend very little time looking at new products,” and the vast array of options at most stores, opting instead to buy familiar items, he said.
For most consumers, “85% of purchases are based on what was bought before. So, for new products to break into the purchasing regimen is hard,” Fryling said. But the Product of the Year logo, which is based on a consumer survey conducted by TNS, helps capture consumers’ attention and gives them confidence because it symbolizes at least 40,000 other consumers bought, tried and voted on the product.
As a result, consumers are 44% more likely to buy a product that has the logo than one that does not, he said.
The symbol, which is awarded to innovative products launched within the previous year with national distribution, also gives retailers confidence that consumers will buy a new product, and thus are more willing to stock it without fear of being saddled with unmovable inventory, Fryling said.
Pay to play
While the award voting process is “completely independent,” entering the competition is not free or all inclusive, Fryling said. Only products that pay can play, and the initial fee for finalists to be included in voting is $7,000.
The entry fee also covers the cost of “quite robust” research analysis on each product’s performance, including how consumers perceive its appeal, uniqueness, purchase advocacy, intent to purchase and trustworthiness, among other factors, Fryling said.
The research also includes consumer reactions, such as testimonials, that manufacturers can use in advertising, even if they do not win, Fryling added.
Winners will need to pay an additional $63,000 to use the Product of the Year logo on packaging and in advertising for two years. Included in this price is a digital media campaign created by Product of the Year’s research partner TNS, which can help manufacturers best showcase the award, Fryling said.
“When winners win, we don’t want this to be a trophy in their conference room. We want them to use the seal” to build product awareness, Fryling said. “So, we give them a head start” by creating a media plan that manufacturers can either activate or not.
Product of the Year’s partner TNS can enact the plan at a “very competitive rate,” or the manufacturer can take the plan to another marketing firm of its choice, Fryling noted.
Other benefits of the seal
Beyond potentially opening more retailer doors, the red winning logo can generate sales and help establish consumer trust, Fryling said.
One way it does this is by extending the “newness” of a product for two years, he said, explaining that FDA allows manufacturers to label a product as “new” for only six months, but that consumers perceive the Product of the Year logo as representative of new products. And this logo can be used for two years.
In addition, TNS research reveals the logo is 25% more effective at generating purchases than the word “new.” It found 39% of consumers were either much more likely or somewhat more likely to buy a product with the logo, compared to only 31% for the claim “new.”
Likewise, 36% of consumers surveyed by TNS said they strongly agree or agree that ads featuring the logo are trustworthy compared to only 9% who said the same for adds without the logo.
This trust can translate into increased sales. According to Nielsen data, the Product of the Year winners outperform category sales by 38.1% on averages. The average winner’s growth is 41.2% compared to 3.1% for the average category.
Using the logo on coupons also generates higher redemption rates, which translates to higher sales. Google Consumer Surveys found last July that 24.1% of consumers said they definitely or probably would redeem a coupon with the logo compared to 19.4% who said they definitely or probably would redeem a coupon without the logo.
And the winners for 2015 are…
Among the 30 winners of the award in 2015, announced Feb. 10, are four food companies, which reflects several major consumer trends influencing the industry, Fryling noted.
For example, Beech-Nut Nutrition Company’s self-named Naturals line of baby food won, underscoring consumer interest in natural foods that are healthy and transparently made, Fryling said. (Read more about how Beech-Nut updated baby food manufacturing HERE.)
Aldi scooped up a prize for its store brand Live Gfree Gluten Free Pepperoni Pizza made with organic ingredients – a victory that highlights the progress private label food makers have made in recent years, Fryling said.
Consumers no longer brush off private label foods as simple me-too products with a potentially lower quality, he explained. Now they view them as high-quality products that offer value, and they are particularly desirable among Millennials, Fryling added.
Werther’s Original’s Caramel Popcorn’s victory in the snacks category is smack on trend with consumers’ renewed interest in popcorn. (Learn how the once tired food category captured Millennials’ hearts and made a significant comeback HERE.)
Finally, Nestle USA won in the candy category for its Butter Finger Peanut Butter Cups, which reflects consumers’ more adventurous eating and their love for nostalgic foods.