Some consumers excel at predicting flops
While brands and retailers continually try to link themselves to trendsetters, a new university study has identified a unique subset of consumers — "Harbingers of Failure" — for their ability to predict product failures.
The study from Northwestern University and the Massachusetts Institute of Technology identified these customers either through past purchases of products that failed — such as Diet Crystal Pepsi or Frito Lay Lemonade — or past purchases of existing products that few other customers buy.
The study, which appeared in the Journal of Marketing Research, analyzed more than 10 million transactions by 127,925 loyalty card shoppers from 2003 to 2009 at a big chain of convenience stores in the Midwest and Southwest. About 13 percent of the respondents were deemed as "Harbingers of Failure". If the group accounted for half of a new product’s sales instead of a quarter, the likelihood of the product succeeding fell by 31 percent. The group also tended to purchase niche items that few other customers chose.
According to The Wall Street Journal, the "Harbingers of Failure" segment tends to more educated, wealthier and have more children than average. Both the wealth and family structure reportedly encourages an openness to try more things.
Researchers said using both a customer’s history of buying flops and a tendency to buy quirky or niche items, a retailer can distinguish harbingers from non-harbingers and make better decisions about whether to continue selling a new product. A regular purchaser of Swiffer mops, for instance, would be identified as someone who was more of a non-harbinger with fairly mainstream and favorable-trend tastes.
"What seems to be happening is these customers have preferences that might be nonmainstream, or as we like to put it, they’re not representative of the overall population," said lead author Eric Anderson of Northwest University, on his university’s website. "We know when they really like your product, it shows that your product really appeals to a narrow group of customers."
- The Customers You Do Not Want – Kellogg School of Management, Northwestern University
- When certain consumers bought its lemonade, did Frito-Lay groan? – American Marketing Association
- Consumers Who Foretell Retail Doom – The Wall Street Journal
Do you see much value for retailers or brands in identifying “Harbingers of Failure” to gauge the success of product launches? Should insights from such customers become a key part of product testing?