New products are often tricky to launch, but doing so amidst a crisis is even more challenging. Here’s a look at how P&G handled the launch of Microban 24 at the beginning of the COVID-19 pandemic.
It’s Possible But Tricky to Launch a New Product During Crisis Mode. So How?
In January 2020, nobody in CPG could have predicted that certain business categories were about to boom; curbside grocery delivery, video communications platforms, and cleaning products were about to explode, but who could have seen it coming? Businesses in these sectors have experienced real category growth during the pandemic, boosting their businesses by delivering value to consumers when they needed it the most.
The COVID-19 pandemic has shaken most of us to the core and taken most of us by surprise, but it’s not the first such event to have done so and it won’t be the last. CPGs must be ready and have as much insight and prediction ability as possible for what happens next.
In February 2020, P&G launched Microban 24, a cleaning and sanitizing product that could kill 99% of cold and flu viruses. The launch coincided with the beginning of the global COVID-19 pandemic and at a time when shoppers were emptying retailers’ shelves of anything that could kill viruses. Microban 24 was on track to end 2020 with sales of over $200 million – more than twice the original projections.
COVID-19 took most business leaders and CPGs by surprise, including the team at P&G who immediately had a capacity and supply chain challenge on their hands; consumers couldn’t buy the new Microban products fast enough, quickly causing inventory shortages. One of the biggest challenges was even just sourcing enough triggers for the spray bottles.
According to the leaders of the world’s most important CPGs, 2020 and the COVID-19 outbreak have changed consumer behavior forever. According to Marc Pritchard, P&G’s Chief Brand Officer, “these are fundamental changes that aren’t going to go back.”
While 2020 was a year of major growth and opportunity for some CPGs, it was a painful experience for many in adopting new ways of working, including becoming more agile, making faster decisions, and dealing with high levels of future uncertainty.
The Microban story begs a fundamental question for CPGs: how can some of them recover, how can those who have won keep flying high amidst quickly evolving landscapes, and how can they stay ahead of the curve? They must be proactive instead of reactive when it comes to demand and revenue forecasting and the respective requirements in terms of manufacturing, logistics, and sales and marketing support.
Leading CPGs like P&G are turning to AI to assist with highly accurate forecasting, enabling new and established brands in their portfolio to remain nimble and having the ability to evolve plans and strategy in near real time. One of the challenges CPGs face is an overwhelming amount of static, historical data collected across the organization and oftenheld in different silos. While executives have access to modern-day KPI dashboards, these often rely on past data and don’t account for the hundreds of factors that can change consumer demand in a world that’s changing faster than ever.
Imagine your ERP system linked with sales and marketing data, your consumer insights, real-time retailer intelligence, direct-to-consumer channels, news and weather data, as well as up-to-the-minute consumer intent and preference analytics coming from social media and listening.
By running millions of ‘what if’ scenarios in a matter of hours, the right AI tool will allow you to continually optimize your go-to-market plans. This includes modelling decisions on category and brand stretch, category adjacencies, and brand extensions. The right platform will give you the power to predict demand, right down to the most granular level: by SKU, by channel, by retailer, and even down to the individual store.
Test new product variants, price points, and shelf-arrangements months before a product goes live, enabling faster time to market and lower development costs. Test assumptions and validate gut feel without the risk of losing time or making failed investments.
As soon as the world changes, like with a COVID-19-type event, a smart AI tool gives you the power to re-forecast category, demand, and supply-chain issues from beginning to end in hours rather than days or months.
Talk to our CPG solution experts and see forecasting like you’ve never seen it before.