A study in the Journal of Marketing Research explains that there is a group of consumers that has a tendency to purchase products that tend to flop and fail in the market. Basing the market’s predictions on this people’s positive feedbacks leads to flops in sales and consequent failure of the product.

The authors of the study Eric Anderson, from Northwestern University, and Song Ling, Duncan Simester and Catherine Tucker, from MIT, explained that “Certain customers systematically purchase new products that prove unsuccessful” and therefore “Their early adoption of a new product is a strong signal that a product will fail.”

The researchers were able to identify this kind of costumers analysing past purchases of products that failed, such as Frito Lay Lemonade or Diet Crystal Pepsi, and purchases of products that, although survive in the market, attract only a small portion of audience. The data concerned the period from 2003 to 2009 and was collected from a big chain of American convenience store involved in the sales of healthcare and beauty products, food, and general merchandise. The rules set for the judgement of the products stated that a product that was no longer being purchased after three years on the market represented a failure or a flop. The sample involved 130,000 customers and about 13% of them, more than 16,500 customers, were chosen due to the fact that 50% or more of the product they purchased represented flops. According to the analysis, those customers who purchased flop products once, had a higher percentage of flop purchase in a second round and this trend were more likely to be confirmed if the customers had made multiple purchases of the flop items. Moreover, a further investigation showed that this kind of customers, the “harbingers of failure”, could be identified not only analysing the number of flops they chose, but also by the kind of products they used to buy in general. In fact, the purchasing trend usually involved the choice of niche items selected by only a small part of the market audience.

The authors explained, “using both a customer’s history of buying flops, and a tendency to buy niche items, a retailer can distinguish harbingers from non-harbingers and make better decisions about whether to continue selling a new product. While the results of this study provide evidence of a class of customers known as ‘harbingers of failure,’ there is also some evidence of ‘harbingers of success.’ Future research is needed to more accurately identify both types of harbingers”.

Written by: Pietro Paolo Frigenti