While you’re developing your product range, it’s essential to identify where your products are in their lifecycle; in this article Joanne Griffin, founder of Arnold and Bird shares her advice for using the lifecycle to forward plan.
Products typically follow a lifecycle from time released to revenue generated (£). As you can see in the graph below there is an introductory phase when your sales start. Then a growth phase where you’ll see the rise of your sales before it hits maturity. These two periods are when your product will make the most amount of money and grow in sales year on year (YoY). After this comes the decline where the product will start to drop in sales YoY.
It’s a good practice to identify where each of your products sits on this graph so you can predict where each of your products is in their lifecycle.
Download the sales data on your website and anywhere else you sell. Different products may be at various stages or sell better on different platforms. Begin by comparing each platform as well as all of your sales together. See which products are your best sellers by revenue and units as this may be different.
A good way of working out how well the products are doing is by completing a daily rate of sales calculation. Which means you can identify what products are performing well, regardless of the time they’ve been live.
For example, you may have a bestseller that has made a lot of money for your business, but if that’s over five years then maybe the sales are slowing which means it’s in the decline period.
Work out your daily rate of sale for each product by dividing the total sales between the number of days it’s been live; this will give you an indication of bestsellers that have plateaued or new products that are becoming bestsellers.
As you can see the chandelier earrings are currently outperforming the drop earrings, even though they haven’t brought in as much money, they are currently making 51% more. You can start to see that the drop earrings are in the maturity or decline phase and the chandelier earrings are in the growth phase.
From this see if you can identify what’s different from the new products that are performing well and apply it to new products. Maybe it’s the style, material, colour or trend?
Doing this data analysis and working out where each of your products sits in the product lifecycle chart means you can identify when you need to develop new products. So enjoy the process!
And if you need an inspiration boost or you’d like specific product ideas sent to you then do get in touch with Joanne. There are four product development packages available to book now. Pick from a current product review, trend inspiration presentation, new product development ideas or a full-day brainstorming session. Get in touch as Joanne would love to help move your business forward.
Arnold & Bird was started by Joanne Griffin to creatively empower design-led souls in making their ideas a reality. She specialises in producing product development ideas for creative businesses to expand their range and bespoke graphic design.
Using her experience of 11 years in e-commerce, Joanne is here to take your Pinterest inspiration and work with you to create designs personalised to your business.