Before You Copy the Retention Playbook, Check What Kind of Category You're In
Across consumer goods, retention has become the dominant strategic conversation. Lifetime value beats acquisition cost, and the fifth purchase matters more than the first. It is good advice for mature categories. For many others, it answers the wrong question.
The issue is not retention itself. It is applying retention logic too early in a category's life. The retention playbook assumes a mature category. There, almost everyone who will ever buy already does, and growth comes from taking share or deepening existing relationships.
Many consumer goods categories are not there yet. They are still in their adoption phase, with most of their potential market sitting outside the category entirely. In those, optimizing retention before category adoption even scales solves the wrong problem.
At H&H Group, where I lead the North America business, the portfolio includes pet supplement brand Zesty Paws, so I'll use that as an example.
Roughly 79% of American adults take dietary supplements. Depending on the measure, only somewhere between a quarter and a half of pet owners give their pets any supplement at all. That gap explains most of the growth opportunity. The pet owner who supplements their own diet every morning and gives their dog nothing is not a retention problem; they have never entered the category. No amount of subscription optimization reaches them, because they are not yet a customer to retain.
When the prize is that large and that unclaimed, the priority is not extracting more value from existing buyers. It is bringing in people who have never bought at all. The game is new-to-brand acquisition, and the two levers that drive it are distribution and education.
Distribution Does the Heavy Lifting
Distribution still does most of the work, and yet the industry underrates it. Many consumer goods organizations now treat physical distribution as a solved, almost old-fashioned lever, and assume the real action has moved to the digital shelf and direct-to-consumer. In an emerging category, that assumption is expensive.
Our own growth has been driven in large part by expanding distribution points, in both existing and new accounts, with retail outpacing e-commerce. The new buyers are disproportionately new to the brand, and often new to the category itself. They are not existing customers shopping a different shelf.
In a low-penetration category, most potential buyers are not searching for the product online because it has not occurred to them to buy it at all. They encounter it because it is in front of them, in a store in which they already shop, when they are thinking about their pet at that moment.
Availability creates trial, and trial creates the category. That only holds if the product delivers. In an emerging category, distributing a mediocre product widely does not build the market; it accelerates disappointment and teaches first-time buyers that the category does not work. Trial is the accelerant, and efficacy is what makes it compound.
Every incremental point of distribution is a new group of consumers meeting the category for the first time. The brands that wrote off retail too early are leaving the largest pool of genuinely new customers untouched.
Information to Guide Consumers
Education is the other half, because availability without understanding stalls. Putting the product in front of someone only works if they understand why it belongs in their cart. Human supplement use did not reach roughly 80% by accident; it was built over decades of patient consumer education that made a daily supplement an unremarkable habit. Categories still in adoption sit at the beginning of that same curve.
Earning the first purchase from a true non-user is slower than retargeting someone who already buys, and that is where the real growth is. The consumer arriving in these categories is often already educated from adjacent ones; the pet owner has spent years on their own wellness journey. The job is to convert existing consumer belief into category adoption — to connect a belief the consumer already holds to a product for their pet and make it easy to find.
This has a direct operating consequence. In an emerging category, distribution and household penetration deserve the seriousness that mature category teams reserve for churn and lifetime value. New-to-brand rate is a more honest signal of health than repeat rate, because a high repeat rate on a small base can flatter a business that is failing to grow its market.
It matters for retailers too. A brand creating new category buyers is not moving share between labels on a shelf; it is expanding the total basket and bringing incremental shoppers and trips into the store. For a retailer, backing category creation in an emerging segment is one of the few genuinely additive growth levers available, rather than a zero-sum fight over existing demand.
None of this means retention does not matter. It matters enormously, in its time. The principle is sequence: penetration before optimization.
That is a statement about weighting, not order. You build the retention fundamentals early, and you simply do not let them dominate the agenda while the category is still being built. You earn the right to obsess over the fifth purchase by first winning the millions of first purchases the category has not yet made.
Reach for retention too early and you optimize efficiency before building the market itself. So before adopting anyone's retention playbook, answer one question first: of everyone who could buy what you make, how many never have? In many categories, the largest growth opportunity is still the customer who has never entered the category at all.
— Akash Bedi, Rotating CEO and CEO, North America, India and the Middle East, H&H Group
