Failure Rates of New Consumer Products: Statistics, Causes, and Ways to Improve Success
Launching a new physical product is a high-risk venture. Various studies and industry analyses show that most new consumer goods fail to survive in the market.
In fact, so many products flop that a market research firm in Michigan hosts a “Museum of Failed Products” displaying over 100,000 discontinued items – from Clairol’s yogurt shampoo to Crystal Pepsi and Colgate’s ill-fated frozen dinners
New Product Failure Rates: What Do the Numbers Say?
It’s commonly believed that 80–90% of new products fail, but recent evidence suggests this oft-quoted figure is exaggerated. The reality is still sobering, though. Empirical research indicates roughly 30–40% of products that reach the market are failures. For example, a study of nearly 9,000 new items on shelves at a major U.S. retailer found only about 40% were still being sold three years later (meaning ~60% had been pulled). Even global surveys put the new product failure rate around 40% in recent years.
That said, failure rates can vary by industry. In fast-moving consumer goods (like foods and beverages), some estimates run higher – 70–85% of new consumer packaged goods fail within a year or two.
(Nielsen once noted ~85% of new consumer products don’t succeed in the marketplace.) On the other end, sectors like healthcare or B2B products might see somewhat lower failure percentages.
Overall, the consensus of recent global studies is that roughly one-third to half of new product launches fail commercially, rather than the 90% myth.
It’s worth noting how failure is defined. Researchers usually count a “failure” as a product that doesn’t meet its commercial objectives or is pulled from the market. This is different from ideas that never launch (those “failures” in R&D stages don’t make it to market).
The high 80–90% figures sometimes confuse idea failure rates with actual launched product failures
When focusing only on products that do launch, about 35–45% fail on average according to decades of studies (with some variation over time) In short:most new consumer products struggle, and roughly half or more may not survive long-term, making product launches a daunting endeavor.
Why Do New Products Fail? Key Reasons
There is no single cause for new product failure – often a combination of factors is at play. However, common key reasons emerge repeatedly in studies and post-mortems of failed products:
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Poor Product-Market Fit (Market Misalignment):
A top culprit is launching a product that no one really needs or wants. In some cases companies misjudge the market or target the wrong customer segment. If the product doesn’t solve a real problem or fulfill a desire for the intended users, it’s likely to flop. Example: The Segway personal transporter was a technological marvel, but it “didn’t solve a real problem for consumers” – it was a solution in search of a need.
Many innovations fail simply because there is “no market for the solutions they’ve created,” often from not taking customers’ true needs into account.
Inadequate Market Research & Testing:
Skipping or skimping on research can doom a product. If a company doesn’t thoroughly research consumer preferences, test prototypes, or conduct test markets, they may miss critical insights.
This leads to products that sound good in theory but falter in reality.
Example: Juicero, a $400 juicing machine, failed spectacularly after launch when buyers realized it was easier (and free) to squeeze the juice packets by hand – a scenario better user testing might have uncovered.
Insufficient research can also mean failing to size up the competition or market trends, resulting in missteps at launch.
Flawed Design or Poor Quality
If the product itself is poorly designed, low-quality, or simply doesn’t work as intended, customers won’t stick around. Issues with usability, reliability, or aesthetics can quickly turn a launch into a fiasco. Example: Google Glass, the wearable smart glasses, generated huge buzz but “failed because it was bulky, expensive, and lacked practical features”, not to mention the privacy concerns it raised.
A product that doesn’t deliver a good user experience or has technical problems (like devices that catch fire or software riddled with bugs) is likely to be rejected by consumers.
Mispricing and Value Mismatch:
Setting the wrong price can sink a new offering. If priced too high, the product may not convince buyers it’s worth it; too low, and it might undermine quality perceptions or yield thin margins. It’s crucial that price aligns with the value customers perceive. Example: Amazon’s Fire Phone was introduced at a premium smartphone price – comparable to iPhones – but it “lacked the same features and app ecosystem” as other high-end phones.
Consumers saw it as overpriced for what it offered, resulting in very low sales. A questionable pricing strategy (whether too expensive or unsustainably cheap) often leads to failure.
Poor Marketing and Awareness:
Even a great product can flop if the target market doesn’t know about it or understand it. Inadequate marketing campaigns, weak positioning, or targeting the wrong audience will limit a new product’s traction. Companies sometimes “generate an insufficient level of awareness” for the product with a lackluster ad campaign.
Or they position the product poorly so customers don’t see why it’s different. If the launch message doesn’t resonate and reach the right people, the product may never gain enough momentum to succeed.
Weak Positioning or Differentiation:
New products need to clearly communicate their unique benefits. If a product isn’t positioned well versus competitors – or if it’s a “me-too” offering without differentiation – it can get lost in the noise. A weak positioning strategy or a commodity-like product has trouble convincing consumers to switch. For instance, BlackBerry’s PlayBook tablet failed in part because it was too similar to the iPad but inferior on app support and user experience.
In other cases, a product may inadvertently cannibalize a company’s own lineup (stealing sales from an existing product without growing the overall pie), which can make the launch counterproductive.
Over-Optimism and Poor Launch Execution:
Companies sometimes fall victim to their own hype. Overly rosy sales forecasts can lead to overproduction, big marketing spends, or ignoring warning signs. When reality falls short, the product is deemed a failure. Additionally, poor implementation of the launch – distribution snafus, supply shortages, or other execution failures – will hurt the product’s chances.
Internal issues like lack of alignment, infighting, or shifting priorities can also derail a product launch before it ever finds its footing.
Essentially, a good plan poorly executed can be as lethal as a bad plan.
There are certainly other factors (e.g. unexpected external events, regulatory hurdles, rapid changes in consumer tastes, etc.), but the above reasons account for many of the common failure modes. Importantly, these issues are often interrelated – for example, inadequate research can lead to poor product-market fit and bad pricing decisions, compounding the trouble.
Real-World Examples of Product Failures
To make these points more concrete, here are a few famous (and infamous) product failures that illustrate why new consumer goods can flop:
New Coke (1985): Coca-Cola’s attempt to replace its classic soda formula remains one of the most famous product flops. Facing pressure from rival Pepsi, Coke reformulated its flagship drink as “New Coke.” The result was “a firestorm of consumer protest” – loyal customers rebelled against changing a beloved product.
In just 79 days, Coca-Cola was forced to bring back the original formula as “Coca-Cola Classic.
The New Coke debacle showed the power of emotional attachment to a brand and taught companies, “If it ain’t broke, don’t fix it.” It failed not due to taste (New Coke won in taste tests) but due to misreading consumer sentiment and brand loyalty.
Image via Museumoffailure.com
Image via Financial Times
Google Glass (2013): Backed by Google’s heft, these augmented-reality glasses were expected to be a cutting-edge hit. Instead, Google Glass quickly became a punchline. Priced at $1,500 and looking like awkward tech eyewear, it struggled to convince consumers of its value. The device “was bulky, expensive, and lacked practical features”, and it raised privacy concerns (people around wearers felt uneasy being unknowingly recorded).
Within two years, Google pulled the product from the consumer market. Poor product design, unclear use cases, and privacy issues doomed this innovation, proving that even a tech giant can flop when the product doesn’t truly fit into people’s lives.
Amazon Fire Phone (2014): Not every big-brand entry succeeds on brand name alone. Amazon’s foray into smartphones was a high-profile failure.
The Fire Phone launched with a price tag and specs akin to top-tier smartphones, but lacked the app ecosystem and polish of Apple or Samsung devices. It offered some novel features (like “dynamic perspective” 3D effects), but nothing consumers felt they needed. Reviews were lukewarm, and sales were dismal.
In essence, the Fire Phone tried to compete as a premium phone without a compelling reason to buy, illustrating the perils of poor differentiation and mispricing (why pay for a Fire Phone when an iPhone or Galaxy offers more?) Amazon discontinued the phone within a year, taking a $170 million loss.
Image via Wired.com
Juicero (2016): This Wi-Fi enabled juicing machine became a symbol of Silicon Valley hubris. Juicero sold a sleek $399 appliance that used proprietary single-serving fruit/vegetable packets to produce juice at the push of a button. Investors poured money in, but consumers balked – both at the steep price and the revelation that the machine was unnecessary.
Investigative reports showed you could squeeze the packets by hand almost as well as the machine.
In other words, the high-tech gadget added little real value. Juicero shut down in 2017 after selling only a few thousand units. The failure underscored the importance of practical value: if a cheaper, simpler solution does the job, a pricey high-tech solution won’t survive.
These are just a few of many examples – from Ford’s Edsel in the 1950s to more recent flops like Crystal Pepsi or the Samsung Galaxy Note 7 recall. Even trusted brands like Colgate have seen experiments go awry, such as Colgate Kitchen Entrees microwavable dinners that consumers found too bizarre coming from a toothpaste maker
How Is Success Measured in a New Product?
Success in new product launches is not just about avoiding failure—it’s about meeting well-defined business objectives. Companies measure a product’s success based on several key metrics, depending on the industry, product type, and business goals. Below are the most common ways success is evaluated:
1. Sales Performance & Market Adoption
- Revenue and Unit Sales: The most direct measure of success is whether the product sells. High initial sales indicate strong demand, while steady or growing sales over time suggest sustained market acceptance.
- Market Share: A product’s ability to capture a meaningful share of the market is a strong indicator of success. Even if total sales are moderate, securing a significant portion of a competitive market can mark a successful launch.
2. Customer Satisfaction & Retention
- Customer Reviews & Ratings: Positive feedback on platforms like Amazon, Trustpilot, or direct surveys can reveal whether the product is delivering on expectations.
- Net Promoter Score (NPS): Measures how likely customers are to recommend the product to others, an indicator of brand loyalty and satisfaction.
- Repeat Purchases & Customer Retention: Particularly important for consumables (e.g., food, beauty, and health products) and subscription-based goods. A product that gains loyal customers has higher long-term profitability.
3. Profitability & Return on Investment (ROI)
- Gross Margin & Profitability: Even a high-selling product can be unsuccessful if margins are too thin. Profitability considers production costs, marketing expenses, and overall return on investment.
- Break-even Time: How long it takes for the product to recover its development and launch costs is a critical measure of success. Faster break-even points indicate an efficient and viable product.
4. Brand Impact & Market Positioning
- Brand Awareness & Perception: Some products are successful not just in sales but in elevating the company’s reputation or expanding its reach into new markets.
- Competitive Advantage: If a product strengthens the company’s position against competitors or establishes a new category leader, it can be considered a long-term success.
5. Adoption & User Engagement (For Tech & Innovation-heavy Products)
- Usage Metrics: In connected products (IoT devices, apps, wearables), engagement rates (e.g., how often users interact with the product) measure success.
- Churn Rate: How many people stop using the product after a short period. A high churn rate may indicate problems with product-market fit.
6. Longevity & Product Lifecycle
- Sustained Demand: A product that remains relevant beyond the launch hype and avoids obsolescence is a sign of strong market fit.
- Expansion Potential: If a product can spawn new variations (e.g., a new flavor, model, or version) or inspire follow-up products, it signals longevity and continued success.
How Businesses Can Improve New Product Success Rates
While the odds of failure are daunting, companies can take concrete steps to improve their success rates. Learning from past failures and best practices, businesses can mitigate many of the risks:
Start with Customer Needs:
Ground every new product idea in a real customer need or problem. This requires deep market research, customer interviews, and empathy. By truly understanding the target consumers – their pain points, preferences, and behaviors – companies ensure they build solutions people actually want. As one innovation expert noted, “many innovations fail because they introduce products without a real need… There’s no market for the solutions”.
Avoid the trap of falling in love with a concept without validating that it resonates with customers. Use techniques like surveys, focus groups, or ethnographic research to confirm the product fits a genuine market gap.
Test Early and Often:
Don’t launch in the dark. Successful product developers prototype and test their products extensively before full rollout. This can include concept testing, beta programs, limited regional launches, or A/B testing different approaches.
Early testing helps catch design flaws, gauge consumer reactions, and refine the offering. For example, a modest test market might have revealed Juicero’s issue (people bypassing the machine) before it went national.
By iterating based on feedback, companies can fix problems before a wider launch. Rigorous testing also extends to quality control – ensuring there are no nasty surprises like safety issues or bugs when the product scales up.
Deliver Clear Value (and Communicate It):
To stand out, a new product needs a compelling value proposition – a clear reason why a customer should choose it over alternatives. This could be a unique benefit, better performance, higher convenience, or better value for money.
Equally important is communicating that value effectively through marketing. Businesses should craft messaging that positions the product strongly against competitors and speaks to the target customer’s priorities.
In other words, make sure people immediately grasp what problem the product solves or what benefit it offers. A strong launch campaign that educates consumers can drive awareness and interest, preventing the product from getting lost or misunderstood.
Price Strategically:
A well-managed launch can make a huge difference. This means coordinating across product development, marketing, sales, and supply chain to ensure everything is in place for a smooth rollout. Key steps include: training sales teams or retail partners on the product’s benefits, ensuring adequate stock is available in the right channels, timing the launch to avoid clashing with stronger competitors, and monitoring early customer feedback closely.
It also means setting realistic goals and not immediately deeming the product a failure if it doesn’t explode out of the gate – some products take time and adjustment to find their market. However, remain agile: if warning signs do appear (low sales, negative feedback), be ready to diagnose the issues and respond (whether through marketing pivots, product tweaks, or other interventions).
Learn and Adapt Continuously:
Improving success rates is an ongoing process. Companies should treat each product launch as a learning opportunity. Post-launch reviews (whether the product succeeded or failed) can yield insights to apply next time.
Was our research accurate? Did we heed what it told us? Did customers actually use the product as expected? Gathering data on product performance and customer usage can highlight mismatches early.
The idea is to create a feedback loop: use real-world results to refine not only the product (through updates or improvements) but also to refine the new product development process. An organization that systematically learns from failure will get better at avoiding the same mistakes and increase its batting average over time.
Success Looks Different for Different Products
Some products aim for high volume and low margins (e.g., mass-market consumer goods), while others succeed through high margins and niche adoption (e.g., luxury or specialty products). Companies must align their success metrics with their overall business strategy.
