The problem of being a negative indicator


I hate shopping. When I have to do it, my goal is to make it as quick as possible and that usually means buying what I have always bought at the same store where I bought it before. What frustrates me is when that item seems to be no longer being produced and I have to then try and find a replacement.

I have noticed that this happens more often than I would like and I put it down to bad luck. But it turns out that it may be more than that. According to Virginia Postrel it may be that I have been identified using ‘big data’ (generated using credit card and store loyalty cards that track purchases) as a harbinger of failure, in that my purchasing an item is a sign that the item is going to be a flop and the manufacturers are more likely to yank it.

[Researchers Eric Anderson, Song Lin, Duncan Simester, and Catherine Tucker] found that strong early sales — the traditional indicator of product success — in fact didn’t matter as much as who the early buyers were. And one startling finding was the emergence of an identifiable segment of customers more prone to buying new products destined to survive less than three years, as well as unpopular “very niche” existing products.

“Because these guys are so consistent in behavior, if you’re selling to a lot of them you’re really in trouble,” said Anderson, a marketing professor at Northwestern University’s Kellogg School of Management, in an interview.

This made me think that I must be one of those negative indicators who, when manufacturers get wind of the fact that I buy their product say, “Uh-oh, we should dump it because this loser likes it.”

The demographics of the people who are negative indicators are interesting.

The larger data set offers more information about who the harbingers of failure are: wealthier, more highly educated, with larger families than other customers. These factors, Anderson suggests, make it easier for people to take chances on new items, including unpopular ones.

While I kind of fit the demographic profile of being wealthier and more educated than average, I run counter to their expectations since once I like a product I buy the same old things over and over again. I even order the same food whenever I eat out. I am the very model of a loyal shopper. The data miners may need to refine their models because as it stands, my very loyalty is a reason why the products I buy are more likely to be discontinued.

Comments

  1. hyphenman says

    Mano,

    For years I’ve heard of people in our age bracket complaining that advertisers don’t market to them, but rather go for the 16-35 (or whatever the current range is) age bracket.

    The common point is that older people tend to have more money to spend than younger people. That is true, but what is also true, a marketer once explained to me, is that we’re less likely to try new products because we’re happy with what we’ve been buying for years and years, so marketing to us—unless the product is specific to our age group—is pretty much a waste of money.

    I often hold to the better-enough paradigm when thinking about new products. I ask myself the question, “Is this new widget better-enough than my current widget to justify making the shift?” I’ve often thought that this was why so many people buy their vehicles from the same manufacturer time and time again.

    Jeff

  2. lorn says

    It has happened enough for it to become a thing. I try something new, new to me at least, it may have been out for some time, and as soon as I find something I really like, it is discontinued. It happens so often that I’ve taken to buying in quantity anything I find I like. Which may, ironically, according to at least one marketing person, lead to its demise. Typical pattern is that things catch on, build, maintain for some time, and then fall off. Marketers seek out the beginning of a decline. Buying quantities means I have enough for some time. So I don’t buy for a good bit of time … which is exactly the sort of sale stumble, if repeated by several thousand people, that might indicate a good time to discontinue a line. Discontinuing early means fewer items left on the shelf that might need to be discounted.

  3. Chiroptera says

    Mano Singham: I even order the same food whenever I eat out.

    Yeah, people with whom I eat out don’t seem to understand that; once I find something I like on the menu, I always order it again forever whenever I go to that restaurant. I dated someone once who always insisted on having to try to go to someplace new each time; me, I like going to the same place and ordering the same thing (although I was never against trying something new).

    lorn, #2: I try something new, new to me at least, it may have been out for some time, and as soon as I find something I really like, it is discontinued.

    Ben and Jerry’s ice cream used to do that to me all the time. They’d discontinue my favorite flavor, then when I found a new one they’d discontinue that one (or maybe the store would quit stocking it — I dunno).

    So far Braum’s hasn’t figured out which of their flavors is my favorite; I won’t mention it here since they might be reading this.

  4. raym says

    You are by no means alone, as the previous comments (and my own experiences) demonstrate. We find the same thing regarding television programmes – we discover one that we really like, only to find that it lasts for a single season, or quite often only a few episodes. Meanwhile, the junk shows (i.e. 99% of them) appear to be immortal.

    The universe is definitely biased 🙂

  5. says

    @chiroptera – it’s pretty easy to make your own ice cream 😉

    I’m actually a fan of novelty: I go out so that I can try new things without having to stock ingredients that I may not want to use again. When I discover something I like so much that I want it to become a staple, I upload it and figure it out and make it myself. The insulates me from the market and generally increases quality (especially for pre-made stuff)

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