“Harbingers of Failure”: When Early Adopters Spell Doom Rather than Boon for a New Product

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There’s an interesting new perspective about certain early adopters of new products:  Rather than being a predictor of success, they could well be a harbinger of failure.

Four researchers – Eric Anderson of Northwestern University along with Duncan Simester, Song Lin and Catherine Tucker from MIT – have come to this conclusion after analyzing actual purchase transaction data collected from consumers.

Their findings were published in the January 2015 edition of the American Marketing Association’s Journal of Marketing Research.

Specifically, the researchers mined a comprehensive dataset of purchase transaction information collected by a large retail chain that sells consumer packaged goods.

What the four researchers discovered was that there are certain customers whose decisions to adopt a new product are a signal that the product will likely fail rather than succeed.

Moreover, their analysis revealed that because these early adopters have preferences that aren’t representative of other consumers in the market, these adoption patterns can be isolated from those of other customers, enabling a company to predict the propensity of a new product to succeed or fail.

These “harbingers of failure,” as the researchers dub them, are consumers who fall into two categories:

  • They purchase products that are “flops” – the ones that end up failing and being removed from the market.
  • They purchase products that, while remaining available in the market, are “niche” offerings that few other customers buy.

Either way, the consumers exhibit purchase behaviors that are an “unrepresentative” subset of purchasers.

The study suggests caution when looking at aggregate positive sales figures in product test markets. Instead of considering sales figures in the aggregate, companies should drill down and study the characteristics of the buyers – whether they are ones who typically back winners or losers.

The report draws ties to several “historical” brand introductions in which purchasers of the Swiffer® mop correlated with Arizona Iced Tea® – both winning product introductions – as compared to purchasers of Diet Crystal Pepsi® and Frito-LayTM Lemonade – both of which bombed.

According to the researchers, the success of the second product (Arizona Iced Tea) could have been foretold by analyzing the sales behavior of the first (Swiffer).

Similarly, the failure of Frito Lay Lemonade could have been foretold by looking at the disappointing sales behavior of the first (Diet Crystal Pepsi).

Because of the extensive database of transactions tied to individuals that is available today thanks to bar-code scanning, loyalty programs and the like, many large consumer product firms have access to a wealth of granular data. The study contends that more people should use these data to improve their share of product introduction successes.

The full report, including research methodology and statistical analysis, can be viewed here.

Electronics Before Bed = Up All Night?

It’s common knowledge that Americans are getting too little sleep on a daily basis. Studies have shown that the average hours of sleep have been declining pretty steadily in recent years. The National Sleep Foundation estimates that three out of four Americans are sleep deprived. Often, people scrimp on sleep each night of the week … then try to make it up on the weekends.

No wonder hospitals and other organizations are doing a land-office business in sleep studies. In fact, polysomnography is one of the biggest growth segments in the healthcare field.

Now, here comes along a new idea as to what might be contributing to our sleep-deprived state. It’s the cornucopia of consumer electronics we use – computers, laptops, smartphones and iPads – up until the moment we hit the sack.

With these devices shining brightly into our eyes, it turns out they’re tricking our bodies into thinking it’s still daytime.

According to sleep specialists, exposure to these electronic devices can disturb sleep patterns and contribute to insomnia. Phyllis Zee, a neuroscience expert and director of the Center for Sleep & Circadian Biology at Northwestern University, is one who contends that light emanating from an iPad or a laptop “can be sufficiently stimulating to the brain to make it more awake and delay your ability to sleep.”

The iPad, Apple’s latest sensation, comes in for special attention, as it’s a device many people like to use when reading before bed … at the very time the brain thinks the environment should be dark. Unlike the Kindle, the iPad’s light-emitting screen shines directly into the reader’s eye, making it more likely to disrupt sleep patterns.

Not surprisingly, people are affected differently. Elements like the brightness of the light and whether there is extensive blue light – which is common during the day but also emitted from computer screens – are seen to play a role. One way to counteract the “blue light effect” is to wear orange sunglasses which are purported to negate the effect of the blue light; although this might help, it probably won’t do anything for the wearer’s fashion sense!

An easier but equally effective approach might be to simply swear off the computer, iPad or smartphone in the last hour before bedtime. Chances are, your body will thank you in the morning.