Think back to your school biology lessons. You probably dimly remember something about life cycles. You might have learned how frogspawn becomes a tadpole, before then turning into a frog.
You’re not likely to have thought that the lesson would help you in an ecommerce career one day. Online shopping may not even have been a thing back then. The fact is, though, that life cycles - and more specifically - product life cycles are critical in retail.
In the same way as our friend, the frog, products go through different stages of development. Their passage through those stages is called the product life cycle. It starts when a product first goes on sale and ends when it comes off the - real or virtual - shelves.
Every line has its own product life cycle. The entire process and the individual steps are never uniform. Some will last longer than others. Certain items may seem to dwell in a particular stage semi-permanently.
Some products, though, will have very short cycles. Hi-tech solutions like computer telephony integration software are a good example. Thanks to the fast pace of development in tech, products get superseded more quickly.
As mentioned, each product life cycle is unique. There are, however, four main stages that all lines pass through at one stage or another. These are introduction, growth, maturity, and decline.
The introduction stage of the product life cycle is when you first bring the item to market. At this stage, a brand’s priority is to promote the new line and ensure efficiency of the supply chain. There are many elements involved in introducing a new product:
Establishing production or supply of the new items.
Branding and making the product available for sale - putting it on the shelves, adding it to your site, or using a brochure creator.
Launching and optimizing marketing campaigns to promote the product.
Setting a pricing strategy to penetrate the market.
Once you’ve got a product to market, you’ll see a growth in sales. At least, that’s the idea. It’s your responsibility to make it happen and capitalize on any uptick. Once again, lots goes into the growth stage of the product life cycle.
You may need to tweak or add to supply chain arrangements to meet increased demand. You could also have to make related changes to processes. For instance, you might need to send staff on customer service online courses. That would be necessary if consumers need particular support for the product.
The maturity stage of the product life cycle is the sweet spot for businesses. It’s where you want your products to reach as quickly as possible. It’s also where you’d like them to stay for as long as possible.
During the maturity stage, awareness of and demand for the product are at their height. What’s more, production and marketing costs are at their lowest. It’s here, therefore, that your margins on a line are at their zenith.
There are plenty of strategies to keep a product in the maturity stage for longer:
Adopting new pricing strategies to beat out the competition.
Adding new features to keep the product ahead of its rivals.
Building a community of brand advocates around the line.
No products will last forever, and after their maturity comes decline. At this stage, competing items start to gain the upper hand. The demand for the product lessens, and sales become more disappointing.
At the end of the decline stage, products leave the market. Brands, though, can try to prolong this final step of the life cycle, by:
Rebranding the product for new uses or target audiences.
Cutting the price or running special promotions.
Bundling the item with another, higher demand product.
So, now you know all about the product life cycle. What you may not have grasped is why it’s essential to have that understanding. In short, it’s because knowing where a product stands in its cycle helps inform your commercial decisions.
We’ve already talked about the different sales and marketing tactics of each stage of the cycle. If you don’t grasp where an item is in its product life cycle, you can’t know which of these are most useful.
More than that, though, tracking product life cycles can give you broader insights. If you sell medical supplies, for instance, your product life cycles could teach you about the future of healthcare. You’ll know the types of items on the up and those on the outs. That gives you a picture of where your niche is heading.