The 80/20 Color Rule for Choosing the Right Colors for Your Products

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts Tracy and Tom Hazard. Get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource, and out profit your way to retail success.

Hey, everyone. Welcome to product launch. Hazard's Tracy's office hours. That's me, Tracy Hazard, and I am going to talk color today. It is my favorite subject, and it's also the one that freaks people out the most because it's so personal. Our preferences on color are so personal, but also so much is riding on it, right? If you don't pick the right color for your product, it won't sell. It's not as marketable, and it's a cost problem. The more colors you have, the more cost implications, the more inventory you have to have. Figuring out that balance and forecasting colors, it's like an absolute nightmare. Sometimes you are not alone if you're starting out. It's an agonizing decision for so many product developers and product designers and product launchers and marketers everywhere, right? This is across the business decision that you make that sometimes people make for all the wrong reasons. I've had a lot of experience in this. In fact, I'm probably one of the foremost experts on picking colors that actually sell in mass market retail. And I've been doing that for 25 years, actually 26 years. It's a hard decision. This is a really hard thing. And really early in my career, I was probably, I don't know, I may have been 24 years old. I was tasked with the decision of creating a product line of colors, of colors, materials and finishes for Herman Miller, who you may recognize for the Aeron chair, which was introduced in 1994. And Herman Miller, of course, makes systems, furniture and all kinds of office seating. And so they were one of the biggest impacts to those panels that you see in offices. They invented that category. And so the materials really mattered. And they had this gigantic line of SKUs. And SKUs, of course, if you're new to this SKU stock keeping units, right? So when you have a lot of colors, you have a lot of SKUs. And when you have a lot of SKUs, you have a lot of money sunk into inventory. And so this was a huge problem for them. And they tasked this young junior designer out of college and said, we have to redesign our entire line. The last time it was done, it was done by a famous Designer called Alexander gerard in the 70s, and it hasn't been done since then. And so here I was, young, intimidated by the idea of this, tackling a 500 plus color line and riding on the coattails of undoing a famous designer who I considered my own hero in that world, undoing what they did. But it was absolutely necessary because when Alexander Girard had designed these, first off, he was a graphic designer, and what we consider a graphic designer today, that was definitely more of his model of business. So the colors were very graphical, very Coca Cola red. It was like very much in that world, very 1970s, anyway. And our offices have changed at this point because this is the mid-90s, right? So they were very, very different. And the tech boom was happening. So this is where the Aeron chair was coming about with technical materials like the mesh. And so they were looking at this and saying, we have way too big a line. A lot of it isn't selling, a lot of it's not efficient, but we have to cut this down. And you're tasked with figuring out what to get rid of, what to make new, and handling this. And it has to be less than 300. When you're done with this, you have to cut 200 SKUs minimum. And so this was a huge undertaking for me at that time, but it taught me so much because I said, how am I going to make a decision? Everybody hates me for it. The architects and designers out in the marketplace who are Herman Miller's customers are going to really hate me. They're going to not have good choices anymore. The organization, they've written on these colors that have become statements within their marketing pieces, and now they no longer have those colors. They'll have to read you photographs, then they'll hate me. So, like, how am I going to make all of these decisions? And how am I going to be sure that the 300 that I decide on are actually going to sell are going to be good? And so this was a really, really tough project for me. I sat back and developed this method, which I use today. And so there are a couple of underlying rules. As you know, the name of my office hours today was the 8020 color rule, or 8020 color rule. And if you're not familiar with this, it's basically the 8020 rule for anything, which is that 80% of the volume comes from 20% of the SKUs, from 20% of the customers, from 20% of whatever it is that you do. What I really learned really early on is that that's true. It's absolutely true across the board with everything you do. But if you get rid of the 80% and only sell the 20%, it actually doesn't translate into more business. In fact, sometimes it translates into less business. So there's a case here where less is not more in terms of color offering. And there's a reason for that. And that has to do a lot of what I learned at Herman Miller and learned in this process and have enacted throughout everything that I've done for my clients and for my own businesses and for our own product lines throughout the years. And that is that you have to have a mix of things at which those 20% become the cream. They become the things that everybody wants. They become the highlight of it. But the other things set up the context, set up the attraction that helps them get to sell. So I'm going to talk about that in terms of something that you might get and understand from an e commerce world standpoint. So if you were just to have black and white as your color options, or black and beige as your color options of whatever it is, because the black and beige sells, and that's very, very common and all of that, the problem is everybody has black and beige. And so every photograph, every thumbnail that you put up, everything you put on Pinterest, everything you put on social media is just black and beige. And it has no editorial quality. It has nothing that highlights it and shows it off and is fun and exciting and gives you something different to differentiate yourself from everybody else on the marketplace. So that's why I'm saying is that it sounds really great to limit your skus to the things that you know will sell. And of course, getting to what you know will sell is not an easy model. And we'll also talk about that in a minute. But that is not a winning proposition in this world because we really have to show things off. We have to highlight our differences. We have to stand out in a tiny little thumbnail. And so color, it can really do that for you. So this is not a decision that you want to make lightly. This is a decision that you need to make with a lot of strategy, a lot of forethought and a lot of balancing though, of the inventory and cost levels to creating those highlight colors and understanding that you will want to have 80% of your volume in the black and the beige in the colors that are in that 20% that are going to do the biggest part of your volume. So that's part of what the framework of what it is. Now back to how I did it at Herman Miller. And this is really an important lesson. I learned to be collaborative at Herman Miller. It's a part of their process. It's about how they do. And I learned that there's a lot of research that needs to come into it. So you start with a lot of data. And in this world, we have a lot of data. We have a lot of data on what sells, but we also have a lot of data that has a lot of bias in it. It also has a lot of mistakes in it because remember, the results that come out of it is only as good as the strength of the data that you start with. And if your data is flawed, it's missing something, it has a gap, then you're not actually going to find the opportunity. If you're not looking at it through that lens of analysis of lens of looking for the gap, looking for the opportunity, looking for what's missing in that data. And understanding this is where we do a lot of it is if you were just to run a survey of what's out in the marketplace and in the stores, I'm going to use something super, super simple that happens to be on my desk at this moment. And I'm going to use a stapler. So I got this ugly, simple little stapler. Hair, black. How many of us have a black on our desk? Probably a lot of people, right? So if I'm going to run a survey of all the staplers on the market and take a look at what's out there and what's selling, I'm going to find some colored ones, probably little tiny colored ones that go. Some that only appear at back to school. So if I happen to look in March, I probably won't find them. I won't find the larger variety of them. If I was looking as I would if I went in June, because in June that's when all the back to school color options start coming onto the market. But they also go away and come back because they are seasonal. So they go away and they come back maybe a different color blue than was last year's. And so these are some of the things where, when we're studying color and when we're trying to make color decisions, if we don't have an overarching view of the global sales of this product. So if we don't know how it goes from January through December and season after season, we don't have a viewpoint of that, we better get some help, we better get some views. Because remember, like when you go in, for those of you who are Amazon sellers or e commerce sellers and you go and you take a Jungle Scout or a snapshot. It's a snapshot in time. It does have some data built into that, giving you like what it was done over the last month and other things. But it's skewed by the results at various times a year. And if you pull it the holidays, there might have been a big promotion that skewed your results. There might have been just a more intense time of year for buying. And so if you only rely on that and you aren't looking at that trend over time, you're not getting the results. And that's the way color works as well. Because colors have seasons, colors have forecasts, colors have trends involved in them. And so paying attention to that throughout the marketplace is really important. And so getting that data right and making sure that you have the largest amount of data possible at any given time is really important. So one of the things that I do in my company is that I survey colors throughout the year in all product categories. So I have it quarter after quarter after quarter. I'm gathering the data consistently. And then when I do an end of year report and put out my color forecast for the next year, it has that good data in it. I didn't just go to establish a forecast and went looking at holiday time to set it up for next year's color forecast. If I did that, it would be shifted to reflect too much heavy holiday influence and that would influence my forecast for the next year. Good forecasters, people who do this for a living, people who are great at it, are always studying the color uses and the shift in the color and how it's changing and what's happening to color and is this a seasonal trend? And they understand that. So that's where you going off your gut and saying, oh, this is what's out there and going off that quick data check, it's a part of it, but it's usually a very flawed part of it. And so we want to be more accurate in that. So that's one aspect that I learned early on from Herman Miller's research based format. That data is very flawed and you must analyze it in context of what you intend to do. The second thing I learned from Herman Miller is collaborative process. Involve the players, involve the customers. In our case there were like multi levels of players. So if you have an on the shelf aspirations, this is a good time to involve your rep to call Tim Bush, go see him and go show him what you're thinking about because he has a little more information on what buyers are thinking. If you have an opportunity to go and present to buyers and get their feedback and say, what are your ideals about color and what works in it? Studying the trends of what's on the shelf, those are things that happen. In Herman Miller there was multiple layers of decision makers in the process. There's a facility manager who would decide how the chairs get distributed throughout the offices. And if chairs were broken, they serviced it. And there's usually a facility manager. And their job is they want everything simple because they don't want to have to worry about that. Blue goes in this office and purple goes in that office and brown goes here. They don't want to have to think about that as like where the distribution is. That's not their job and that's not what they want. So if their decision, everything would be black and easy to clean and all of those things. So their decision would be very skewed in what they wanted. If we didn't involve the other people. Like what do architects and designer want to specify? And because they are the ones who make the top level decisions about what to choose and what to present to their clients. So if Coca Cola is doing a big office and they don't want red everywhere in their office, who's going to make that choice? Well, they're going to hire an architect and designer to plan that space. In some cases. This is how it goes. When you're thinking about that in terms of like, what does that mean for your brand? If you're doing juvenile products, for instance, the mom, the dad, those are the gatekeepers of making the final choice. And they're the ones plunking down the credit card. But the kids have a choice, right? When I have a choice of colors, I'm going to say, which one do you want? I just bought my daughter headphones for her tablet and there were three choices of colors. And I went to her and I said, what choice do you want? Your sister picked purple, so you can't have purple because I don't want you to have the same one. And I don't want to get confused. So you have two choices left. Which one of the two do you want? And so that's at a choice. Kids have a choice in those juvenile products, so what they think matters. However a parent is making the final choice or the final decision. And sometimes they don't ask their kids. So these are the decision makers you might have to consider in the process. And then also, of course, at the end of the Day the user matters, right? And so what does the user think? What does that matter? And so the consumer of it is not always the purchaser of it, because sometimes things are gifts. So you have to think about that in the approach of things. It's like, am I getting enough viewpoints of it? Because if the gift giver, this is a gift item, if the gift giver isn't choosing it because they're so afraid to make a mistake and pick the wrong color, they're opting for the simplicity model, then even though the consumer would prefer something else, maybe I'm doing them a disservice by offering this basic. Maybe I should offer the specialties. So these are considerations in the process. And so you need to involve all the players. This is a great time to get someone like Laura Hazard involved. Ask questions, show your color options to actual consumers or to parents who might buy, or to gift givers, grandparents, whatever level that might be in the process is. This is a great way to do a market survey of the color options on your product, though. So that's the third thing I learned that deciding on a color in a chip is a completely different model. So picking that wall color behind me, you can see how dark that is. It's like a dark, rich brown eggplant color, right? Picking that color on that swatch card is one thing. Seeing it on a wall is another. Seeing your colors on your product is another thing. And especially when you have a product that has texture to it, a product that has details that may or may not be easily seen based on the color you put it in, in context matters. And so that's where we go with things, is that we really make sure that when we're asking people, do they like this color or don't they like this color? Will they buy this color or won't they buy this color? That matters. Will they use it, Will they show it off, or will they hide it in their bag? These are the questions that you want to be asking. These are the things you want to find out about when you're doing that. The context of it and showing it in its actual use case really matters. That's really where we're focused on and where we go with the colors. So we really analyze the data and really make sure we have the best data possible. And data over time. Collaboration, we ask all the players in it, we ask all the decision makers in the process, we really survey and we review with them, and that's that. So a collaborative model of making decisions about color. And then third that we really do make sure to show the color in its actual use and not out of context, not on a little piece of paper, definitely not on a computer screen. That is also something we never show color. We show color in physical product or color in rendering that color in photographs. That is what it will actually look like in those photographs. We don't artificially color them. That's really important because if those photographs are going to be the only thing that someone is ever going to see to buy it, we need to know that they're reading the color the way that it will be seen when they purchase it. So on the shelf means in person and in e commerce means in digital, but not rendered in photographic form. And so at all possible. We try to give it that. Obviously sometimes we have to render things because we can't make it yet till we make a decision on the color. But we try to get samples. And we usually don't have a problem with any of our suppliers in getting colored samples made. Especially if you're dialing in and trying to get a specialty color. We almost always can make that happen as well. Sometimes for that purpose though, you have to pay for your sample. So just be aware of that. But it is critically important to make sure that it is what you thought it would appear like on the product. Sometimes the color's too dark, too muddy. It makes it more difficult for someone to see the wonderful features because of the color choices. So this is a double checkpoint that you must, must have. Now, we've got lots of good information. We've got decisions making. And this is exactly how it went at Herman Miller when I did this. And so we gathered the data on what sold and what didn't sell and what was working and what wasn't working and where they were sold matter to us as well. So what we analyzed all that in the data and I had these. I mean, I'm a designer, right? I'm an artist, I should be drawing. Instead I have Gantt charts and like pie graphs, spreadsheets, all these kinds of information. I put it all up over the wall. And we would analyze that, we would look at that. But it was always a reference for us. We didn't rely on it because if we just relied on it, we'd make this straight cut across things and we might miss out on things that they were selling really, really well because they were going into a very specific application. So they had three really big customers who would buy them. But there were these other colors over here that were being bought by hundreds of Customers just in smaller quantities. And so maybe if we could get those highlighted better, we would be able to sell more of those as well. So it would have been an imbalance for us because something that sells to hundreds of people would impact them more if I removed it than something that sold to three customers. In that case, what we did was remove them from the main line and still made them available on special order for those clients only. And actually it was wonderful because it created a money making opportunity, an opportunity to go back to them and say, these colors are no longer available, but you can still have them. It's a 10% upcharge. And so it helped them really with their operational efficiency and the inventory of that. Another option is not to charge more, but to say you can have these custom colors, you can have these specialties that we've discontinued. They just have an extended lead time, they take longer to produce. So that's one of the strategies that we did for what we were removing from the line. But after we had all that data laid out, we set out and I consulted with all kinds of designers and other things and said, we've got all these colors and they actually have to work together. And so this is something that we don't think of very often in our own product line. So when you've got a big product line and a bunch of things, are you sitting back and thinking and analyzing it, looking it from the place that says, wow, my customer is going to buy this purse and this jewelry holder and these things, and they don't need to match exactly. But if they all have this color preference and I've got them selling out over here, I know they already like this. So what's the best coordinating color for that? What marries together and what happens when I put them together in a photograph and I'm showing this sort of lifestyle shot of these things together? So if we treat each product as its own separate thing and forget about the things that are selling together, even if they're not our products, they're products that are companions for us. So we did a product. It was supposed to go into bathrooms. It was like a utilitarian holder for beauty tools. They wanted to make it in this clear, natural color because they wanted it to be like nondescript in it. And so we started to take a look at that and say, well, what if we put this in our bathrooms and we hook this to the mirror and we hook this to the wall and we went around to this. What does it look like in those places? What we found is that that clear color looked cheap and dirty and didn't look sophisticated enough. But when we switched it to a black, all of a sudden it fit in all styles. It stood out, it was easy to photograph. It worked for that. And when we put it in a couple of key colors like spa blue, it really sung. And it made it so much stand out so much better against products that were half their price. It just had so much more value. So putting it into that kind of situation, which you're going to see, what it's going to go next to, what it might be photographed with, what somebody else might buy as a companion to go with it even when it's not your product, is a critical step that you should take it before you make a final decision on any color. And then the third thing is once we had all that information and we had a designer look at it because we wanted other designers, and I was designer of materials and the colors, so I made the initial choices of what they were. But we really wanted architects to look at it, and we wanted interior designers to look at it. We wanted someone with a design eye to look at it because they're seeing trends that I didn't see. So because I was focused on the material side of things, I wanted to make sure that I had that bigger focus. And so that's why I mentioned before is that like, unless you have the bigger view of the marketplace or bigger view of what's going on in beauty, what's going on in the trends in the marketplace, and juvenile, what's going on in those marketplaces, unless you have someone who can take a look at that for you, you might be on a declining trend and you'd be losing value if you chose those colors, or you might be on a trend where you're on the early start of it. And so that means that you may want to not go in heavy into inventory, but you want to go in and make sure you have it because it might be a growth opportunity for you as the market shifts and as that color becomes more predominant over the course of the year, having that outside viewpoint is very, very helpful because we really also get stuck in our preferences and forget about that consumer. And so sometimes someone who kind of watches over that industry can see an overarching and look at that, especially if your results from your consumer research comes back muddy. So it happens sometimes where we our sample size might be a little too small. Lara, in her call that she did with me, on the interview that she did with me introducing what she does, Lara talks about 300 is the preferred sample size. I have other people who've done 100 and still had it be relatively good. But when you have a smaller sample size, you need to have an overwhelming result, meaning that you need to have not just 51% like this color over that color, you need to have it be like 80 to 90% like this color over that color. And so it really needs to be significantly shifted to one side versus the other for you to make an assessment out of a smaller sample size. So if you get this sort of muddied results, like you've shown at six different colors and they like all six, or they like them all equally, that's a little muddy. And you really then say, well, what if you only had this one and this one? Which one would you choose? And so kind of diving in a little deeper, maybe doing a second round or doing a bigger sample size might be necessary, or saying, get an expert. And that way you can help say, okay, I've heard enough indications that everybody liked all six of these colors. But if I'm going to offer all six of these colors, how do I balance my inventory? How much should I buy? Which one's going to be stronger in the marketplace? And if you don't have the information, if you don't have the experience here, it's time to decide and get an expert in. Now, here's one more caution that I have for you. I have a client who decided to hire a branding and graphic expert. They went in and we had sort of established what we thought from a product placement side from what was going to compete on this was going to be an Amazon and direct response marketing sold product, what we thought would look good in photographs, what we thought would sell, and all of that, and what we thought would also be really nicely produced and work in context. So we came up with a color program and we had done the product. And then right at the end, she needed to redesign her website and her logo and do all of those things. And when she did, she hired this brand designer, and the brand designers decided that this product was an opportunity to slap the brand on everything. And so we should have the calling color of what the website was. And whether your color is orange or yellow or purple or whatever that might be, it's tempting to slap that color on your product and have that because you think it will look better on your website when you take photographs for your website. And I don't disagree. In some cases that can work. But to make a lot of inventory of that would be a huge mistake. And in this particular case, my client could only buy one SKU of colors because the minimum run was too high and they would not have allowed it was based on the printing of something so could not have done multiple colors within that line. And so to then choose only that sort of statement color as her choice would have been a huge waste of inventory. So this is something we need to proceed with. Caution is branding is one thing, but product color sales and the amount of inventory you have and minimum runs and all the things involved in producing a product in color has to be considered in that process. And is it going to be worth the impact? Because you can always produce a yellow one, photograph it, stick it on your website and just say, hey, this one's not available, Sorry, limited run only, it's gone already. You can do some things like that and yeah, you'll piss off a few yellow people who love yellow, but you won't be sinking your money into inventory that is going to just sit on the shelf. So be very clear about that. Make sure you're getting an expert in who understands that and knows that and is advising you well on your balance of your forecast and or make sure you've really looked at your historical data and understood that. And this is the temptation going from year to year is to just cut the colors that don't work. So please remember which ones also help you make better photographs for your social media posts for those kinds of things. Look, dial your inventory way down on them because you're placing reorders with your supplier. You now should have more negotiating room for how many you make in each color. Dial that down, but don't skip them. Don't cut them all together. To finish up my story about Herman Miller, so what ended up happening was we actually cut in the process, I realized that we could cut 300 SKUs. So instead of just cutting 200 like I was commissioned with, I cut 300 skews and created a hundred new ones. And so I now adopt this into this process I call Cut, clean and Create. It's this ongoing process that I do for companies and I don't just do it on color, but I adopt the same model of it with products too, functions and features. But when you cut down, cut deep enough to make your operational excellence, but not to damage that ability to have your showpieces or whatever that may be. But maybe that's time for you to shift those showpieces, right? Maybe it's time for a refresh. Your product needs to come out of the 70s and turn into something that's modern. And so you take a look at that and go, what's really kind of playing pretty well. But it's been a really long time and maybe it's a slightly outdated blue and it needs to be refreshed up. That's where we clean them and we bring them up to date. And so when you're going to do a cut, that's a good time to do an update at the same time of those colors. Having new colors, having a refresh line every year and not offering the same thing, I know it creates complexity in your listings on Amazon and all of those things, but as long as you've got your main SKU and your main parent skew, whatever you call them nowadays in the listing program, when you've got that going, that's not going away. You're just adding in a few new colors, a few new companions, and that's going to help keep it boosted, keep it exciting, keep it selling. And then from there we create new bridges. And that's what we did at Herman Miller was I cut the 300. We cleaned up some of them, the existing 200. We made them in better, we used the same product, but maybe we made them in more sustainable ways, easier to make where some things might have been yarn dyed and we created them into Peace Dye products. And so we duplicated them and shifted suppliers. That's a time that we did that. But we kept them visually and aesthetically the same. And then we added this hundred SKUs that helped bridge. They helped make all of those 200 more useful. So those ones that had been selling to hundreds of customers now started selling to thousands of customers because people found bridging fabrics and things that would help make it work for them. And so that's how we did it, is we created these bridging products in it and we expanded their line and that really made them take off. And today this is the model actually. Those hundred SKUs now actually come from a third party. And Herman Miller only carries those 200 core. And those hundred SKUs change all the time based on the trends in the marketplace. And Herman Miller doesn't have to deal with it. They use a third party company that is dealing with like constant trends and creating statement pieces and, and things that you might put on sofas or on walls and wallpapers. And so they deal with all that. So they're constantly in on it and up on it. So Herman Miller doesn't really have to worry about that anymore. And this is how we set that in place. And so this is a strategy for you as well to be kind of thinking about this. It's like, do you want to bring in these holiday only items? Do you want to bring in a seasonal item? Do you want to bring in these things and really put them on trend, but not mess with your core line? These are some strategies as well to getting it so that while you may still get 80% of your volume coming from 20% of your SKUs, you are still balancing out the profitability of your line overall and accepting of that. Because I can tell you I've tried to make it different, I've tried to change that number and there's about nothing you could do about it. It is how it works because too few choices make people feel limited, they go elsewhere and too many choices make people feel paralyzed, so they can't make choices so they default to the easy things like black and beige. So it's really kind of one of those things where the balancing act just really has to be right. And so now I know I've like totally freaked you all out about making choices about color. But you know what, that's why I'm here. And so if you want to ask me these questions in an upcoming office hour about color, even though my topic's not about color, please do it. There's also ways to make meetings with me. Go into my expert profile and click on the link there and go make a meeting with me, send me an email, set a time and we can really dive deeper into these subjects. I'm going to do in June, I'm going to do my color trend report, my mid year color trend report. So I'll be giving you a sense of how color's going, what's happening. It will also be the precursor to what I do because I give a holiday forecast and so I will have already given it to my clients, but I'll be sharing it with you after that standpoint and so giving you that idea of what we see as the trends coming for the holiday choices so that you're aware because if you're making some final decisions about the inventory and the POS that you're going to be putting in the purchase orders you're going to be putting in for the product that's going into quarter four, you might want to tap into some of the trends that are happening and be on trend and being able to be shown so that you're right in that appeal of the gift giving season. And so this is a big thing, especially in the metals area, metal choices sometimes switch up for the holidays. Metallics change and so these are some of the things I will talk about when I do that forecast and I will be doing that in the beginning of June. So if you have any questions at any time, feed them into the platform. Looking forward to talking with you on a future office hours. And this was one of these early ones before we have had a lot of members in the platform here. So there's nobody on the call right now and that's okay, that happens. But remember, you can jump on these live and chat with me and ask me your burning questions. And I know I went a lot longer than we normally would in these calls, but I knew nobody was going to be on the line and I thought I'd give you a deep dive into all of these color topics. So thanks again for listening everyone and thanks for being a member of Product Launch Hazards.

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