Very long tail (trail?) of initiatives which don’t succeed
Now the evidence – Average UK price of an item = £1.Hence 2.5M shoppers almost has to equate to £3m.You can be big with lower penetration (e.g. Baileys Hazelnut) when your average selling price is much higher >£5 or £10.However if I know your penetration and RRP, I know your sales.
The same is not true with repeat rates. Very few (if any) launches which have been through the screening and testing process fail through lack of consumer repeat once they hit the shelves – they fail because they haven’t attracted enough buyers.One function of the consumer behaviour is that you are much more likely to repeat buy a brand in your repertoire, than someone picked at random is to purchase it. This comes out particularly with small sample sizes.A brand with 5 purchasers is much more likely to have 3 repeating, than one 50 having 30 and certainly 500 with 300. Hence the launches with the highest repeat rates are invariably small – or particularly niche.However, by the time you have thousands on buyers, then frequency, loyalty and repeat all follow as a function of this. Certainly take the old maxim of needing 40% repeat rate to be successful with a large dose of salt.
Continuing to emphasise the importance of distribution1 store = .2% chance of £5m2 or 3 stores = 1%(Any) 4+ = 15%
And finally number of SKUs in the launch3+ = 17% shot
Pictures --- this years winners….We imagine to get X% to buy Y% must know about you?