Latest Isn’t Always Greatest: Why Product Updates Capture Consumers

 Products and Updates:

Latest Isn’t Always Greatest: Why Product Updates Capture Consumers   in HBS 

06 DEC 2022| by Michael Blanding

Consumers can't pass up a product update—even if there's no improvement. Research by Leslie John, Michael Norton, and Ximena Garcia-Rada illustrates the powerful allure of change. Are we really that naïve?

Suppose you’re in the market for a new selfie stick for an upcoming vacation. You see two models online—one that extends to 24 inches and the other to 16. Seems obvious that you’d pick the longer one, right? Bigger and better panoramic pics!

Well, not necessarily.

When presented with this exact scenario in an experiment, most people did indeed choose the longer stick, whereas only 15 percent initially chose the shorter one. However, when the short version was labeled as “newer,” twice as many, about 31 percent, chose it—even though all of the other product information remained the same. Why? Because consumers gravitate to merchandise labeled as “updated,” even if the items are not necessarily improved, according to the results.

"ONCE SOMETHING SAYS ‘REVISED’ ON IT, IT MAKES YOU SUSPEND CRITICAL JUDGMENT."

“After showing people a product labeled as revised, they assume that it is necessarily better,” says Ximena Garcia-Rada, a former Harvard Business School doctoral student who is now an assistant professor at Texas A&M University. “We see a significant proportion of participants shift to the objectively inferior product when merely labeled as revised, even though it is described exactly the same way.”

Garcia-Rada is lead author on a new working paper about the study, co-written with Leslie John, the James E. Burke Professor of Business Administration at HBS, and Michael Norton, the Harold M. Brierley Professor of Business Administration at HBS, along with Ed O’Brien, an associate professor at the University of Chicago.

Consumers put on blindfolds

The researchers performed dozens of experiments, using products ranging from gummy candy to dictionaries, and testing out labels such as “newer version,” “updated edition,” and “revised product.” In each case they found the same thing: A significant percentage of customers preferred the revamped product, even if it was identical or worse than an unchanged counterpart.

In one study, the researchers asked participants to sample two gummy candies, and they randomly varied which gummy was labeled as updated. “They’re eating gummies, and they’re like, ‘Oh, it’s the revised gummy, yum yum, it tastes better,’” says John. In another study in which participants played a video game labeled as “version 5,” they even reported enjoying the game more and experiencing fewer bugs than those who played the exact same game labeled as “version 2.”  .... '