November 22, 2022

New Items Are Not Best Items

Back to the table framework we've been studying this week, take a look at share of sales from new items by product decile and customer decile.

Two things are worth pointing out in this table. First, new items are seldom best-sellers. New items require patience ... they need to be developed (just like customers need to be developed). Second, there are interesting trends in the table. The best customers are less likely to buy new items than are other customers. We teach our best customers what they should purchase, and guess what? They purchase what we tell them to purchase!

The second point is an important one. If our merchandising/product teams want to sell something different, our best customers frequently say "no" ... the best customers hold back brands looking to change. This is why, so often, it is best to launch a whole new brand than it is to try to transform a brand from within. Best customers simply don't want to change.

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