In last week’s blog post, I wrote about how the current economic situation is impacting consumer spending habits. That was the first of the two overarching trends that are covered in detail in Housewares TrendTracker 2014. I call them overarching trends because these trends are profoundly changing what consumers buy, how they get information, and how they make purchase decisions. As such, these trends impact every company in the housewares industry. Savvy housewares manufacturers would do well to pay attention to these trends and determine what the implications are for their company.

This week’s topic is the second overarching trend — technology trends and their impact on consumer purchase decision making and buying habits.

What Housewares Manufacturers Must Do to Good Product Reviews

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56% of American adults owned a smart phone and 35% of Americans ages 16 and older owned an iPad or other tablet device, according to the Pew Research Center. The numbers are even higher among trend-setting HomeTrend Influentials. 89% of the members of the HomeTrend Influentials Panel own a smart phone and 77% own a tablet.

The Internet and mobile technology are having a profound impact on how consumers make purchase decisions. Back in October, I asked members of the HomeTrend Influentials Panel if the introduction of new technology in the last couple of years had changed the way they research major purchases. 58% said that it had. When asked how technology had changed the way they research purchases, a number of HIPsters said that product ratings and reviews have become a far more important decision making factor. One survey respondent put it this way, “I now have so many ways to get other people’s opinions, which matter more to me than what the manufacturer’s websites can tell me.” Several respondents noted that they rarely buy anything without reading the product reviews first.

A study conducted this time last year by Baynote, a San Jose, California-based software company, corroborates the importance of product ratings and reviews as a purchase decision-making tool. 33% of respondents to the Baynote survey said that online ratings and reviews influenced their online purchases and 19% said that online ratings and reviews influenced their in-store purchases. 25% of respondents said they looked at product reviews on their smart phone before visiting stores; 18% looked at product reviews on their tablet before visiting stores.

Implications of this overarching trend

The consumers’ increasing reliance on product reviews and ratings poses a threat to housewares companies. Why? Because housewares manufacturers will no longer be able to base new product decisions strictly on management experience and intuition. Certainly, intuition grounded by years of in-market experience should always be listened to carefully, but it can no longer be the only voice that is listened to.

Housewares companies will no longer be able to afford to bring new products to market without knowing what consumers think of the product before the product hits store shelves. They need to incorporate consumer feedback into the new product development process.

Here’s a real world example of how one housewares manufacturer avoided making a very expensive mistake by getting consumer feedback on a new product concept. The company had been asked to develop a new product for Williams Sonoma that would replace a store-branded product that wasn’t selling well. After evaluating the product, my client hypothesized that the problem with the product was that it was really hard to use. They came up with a product concept that was easier to use and would deliver better results.

Before they decided to invest in product development, they wanted to find out if the people who shop at Williams Sonoma would be interested in the product. To find out, I conducted an online product concept test with the 600 people who shopped at kitchen specialty stores such as Williams Sonoma, Crate and Barrel, and Sur la Table. I also conducted a central location use test of the Williams Sonoma product with a group of HomeTrend Influentials.

The research revealed that my client’s product concept was preferred over the one Williams Sonoma is currently selling and confirmed that the Williams Sonoma product does not work well at all. However, the data also revealed that no matter how much better the product was than the one Williams Sonoma is currently selling, most consumers would not buy it. Most of them already had a tool that did the job pretty well. The benefits my client’s product delivered were not compelling enough to outweigh the fact that the product took more time to set up and clean and did not do the job any better than the tool most of them were already using.

How to incorporate consumer feedback into the new product development process

Ideally, you should get consumer feedback at five points in the new product development process.

  • At the beginning, when you have several different product concepts and are trying to decide which ones to move forward with: A concept screening test would weed out marginal product concepts early on before you’ve invested much money in product development.
  • When you have fleshed out the product concept and are ready to move into development: a product concept test would tell you how interested consumers would be in buying the product so you can pull the plug on the product concept if it doesn’t have enough consumer appeal.
  • When you are ready to start developing packaging: another product concept test, this one with specific questions about benefits and features, would provide direction on what copy and images you need to put on the package and would confirm purchase likelihood.
  • When you have prototypes: a central location or home use test would tell you how interested consumers would be in buying the product once they’ve had a chance to touch, feel, and use it.
  • When you have final product and are getting ready to ship: a home-use test would identify any potential performance/functionality problems and would tell you if the instruction manual is clearly written and provides all the information the user needs.

What changes has your company made in the product development process as a result of the changes in how consumers make purchase decisions?