The traditional model year refresh, a long-held practice in consumer goods, may be about to change – forever. Initially intended to generate customer interest and gain competitive advantage, these annual updates have evolved into a source of frustration for designers and a challenge for brand management.
Often reduced to minor specification or colour changes, these product iterations render ‘last year’ models as obsolete, leading to a surplus of outdated stock gathering dust in warehouses. Discounting this surplus can devalue the brand. Occasional sales can be seen as a bargain, however continual discounts mean customers can wait for the next sale, affecting the perceived value of your products and ultimately devaluing your brand.
To make matters worse, these launches are often timed to coincide with annual industry exhibitions or the start of a new season. Not only syncing your product launches with your competition, but also creating a predictable pattern that dilutes impact on your customers. So, why are we witnessing a potential end to the annual product launch cycle?
The global COVID-19 pandemic caused chaos across various industries. Factory closures aimed at curbing the virus’ spread led to depleted stock levels and product shortages. Whilst we witnessed huge consumer habits swings with populations under lockdown. Buying habits shifted towards home, family, and hobbies, causing a surge in demand in the outdoor industry.
To combat losses from temporary closures and meet escalating demand, factories responded by increasing minimum order quantities and volume of demand led to extended lead times. The changes forced brands to forecast, pre-order, and commit to product at unfamiliar levels and timescales.
The confluence of heightened demand, limited availability, alongside global uncertainties and conflict resulted in price hikes across multiple sectors, including energy and food. Which in turn fueled inflation.
The aftermath was a perfect storm: a sudden drop in demand coupled with an oversupply of stock. Extended lead times left brands inundated with excess inventory, forcing a fundamental shift in their approach to product launches.
Instead of dumping surplus stock in clearance sales, strategic brands are now introducing new product as existing stock depletes. Colour variations are no longer confined to a specific season, and product launches are strategically planned to align with market demand and inventory levels.
The traditional model year product launch might be approaching its end, replaced by a more dynamic and strategic approach that caters to consumer needs. The shift from continual annual iterations towards a more flexible and responsive product launch strategy shows a positive move towards sustainability and more targeted product design approach.
This offers several advantages:
The death of the model year product launch is not just an industry shift; it’s a sign of a maturing market. Brands are realising the importance of understanding customer needs and producing products with a longer lifespan and offering greater value. It’s a move towards a more sustainable future.
If you want to know how we can help you take a more strategic approach to your product development, get in touch.
