Powder City has grown from offering 50 products just two years ago to more than 250 today. While expanding our product line, we’ve consistently grown our revenue by 10% month over month. For us, product development has been critical to growing our business. But, while it’s important to move into new sales channels and scale your operations, many factors can influence the decision to expand your product offerings. Timing, customer demand, competitive landscape, cannibalization of other products, and manufacturing costs are just some of the things to consider when you’re thinking about developing new products. With the right processes in place, however, product development is a highly effective way to scale your business.
Organize and Prioritize Product Requests
Many of our new product ideas come from customer suggestions or requests. A lot happens between an initial request and introducing a new product to the market, so it’s important to have a tracking mechanism in place. We use Asana to stay organized and track product development through the vetting, market research, and viability assessment stages. It’s also helpful in terms of prioritization as we have a clear view into how many customers have requested a certain product. If the same request keeps appearing, it’s easy for us to see and we know to move it up the list. In addition to Asana, we use marketing tools like Google Analytics to track terms, phrases, and products our target audience may be searching.
Be Diligent When Selecting Vendors
Since our business directly affects the health of our customers, choosing vendors can be difficult, to say the least. There are many certifications and requirements vendors must meet, and we also need to trust that they’re adhering to all relevant safety and health procedures. While this isn’t relevant to all retail businesses, it’s always important to know your vendors and understand the processes they follow and materials they use. We always ask our vendors to send us their step-by-step process for making ingredients. Actually walking through this process with a vendor helps build trust and understanding, which is important in any industry. Cheaper certainly isn’t always better, so make sure to have a list of priorities and non-negotiables when searching for vendors.
Use Bundling to Move Less Popular Items
Bundling is an excellent way to move product that is either nearing the end of its lifecycle or that has simply flattened in growth. Pairing an item that falls into one of these categories with a bestseller is an excellent way to keep it moving off the shelves. Additionally, bundling can be used to introduce new products by pairing them with products customers already know and love. One of our fastest selling new products right now is actually just a bundle that pairs complementary supplements.
Find Reliable Technology for Tracking Product Performance
It’s important for us to have a tool that really shows us which products are moving and where we’re making or losing money. Stitch Labs has basically transformed the way we do business because we have real-time visibility into decrementing stock or new products arriving. Before, we were pulling information from different places and vendors and compiling them into a spreadsheet. With Stitch, data updates in real-time, providing us with accurate analytics and reporting.
While there are many factors to consider before you jump into creating and launching new products, we’ve found it’s a great way to keep customers interested in and engaged with our brand. It also keeps life interesting for our team as we’re always dreaming up our newest product!
To learn more about how Powder City has grown their business through product development, watch their webinar with Stitch Labs. For more ideas and suggestions for growing your retail business, check out the Ultimate Guide to Scaling Your Retail Business.