Retail chain operations managers can make their stores and chains more profitable simply by understanding the retail product life cycle better.
In general, there are five distinct life cycles for any retail product. Below is an overview of the product life cycle stages and how any retailer can use these stages to profit their business.
- Development – In the development stage of the product life cycle, manufacturers are still planning and creating. Retailers can use this time to get their staff up to speed on new products that are not yet ready to sell. If the product is coming from a major manufacturer or is following up a similar product that was popular, some early marketing can build excitement and expectation among your customers.
- Introduction – The introduction phase is the beginning of the sales cycle for new products. For highly anticipated products, retailers can host a store event to draw customers to the store and buy new products at a discount. It’s also the optimal time to educate your customers on new products before they get popular.
- Growth – In the growth stage of the product life cycle, products are catching on with retail shoppers. This is the time when retailers need to ensure that enough stock is held in inventory to meet the growing demands of the consumer base interested in the product. You’ll need to keep a close eye on sales trends, seasonal dips and spikes, and other key events that drive sales for specific products.
- Maturity – At the maturity stage of a product’s life cycle, most consumers already know what the product is and how to use it. The product will have its fans and detractors. This is the time when you need to make sure your inventory is optimized to cover expected sales and that your staff is well versed in product information to service your customers.
- Decline – Every product eventually loses favor with its audience. New products rise to meet consumer expectations or to take advantage of technological developments. In the decline stage, just like the growth stage, you need to keep an eye on sales patterns so that you don’t overstock your shelves with merchandise you’ll end up discounting. This is also a good time to stock products that are beginning to replace the one in decline.
Serious retailers should know the product life cycle and build your sales strategy around that life cycle in order to optimize your revenues and profits.
