Preventing 'success disaster'

Message on Hatchimals website in December, 2016

A Google product expert--one of the team behind the new artificial-intelligence Google Translate technology--recently spoke about the need to prevent success disaster. That's a situation in which an organisation lacks the practical capabilities to meet high demand for a product.

In other words, suppose something new like the revamped Google Translate is tested and adopted by a large number of users. The result would be a strain on Google's network unless it planned, in advance, for an extended, sustained surge in usage. Meaning new processing equipment and new networking equipment. Which Google did, in fact, install prior to revamping Google Translate this year.

Family Search, the free genealogy website, also understands the potential for success disaster. As more people worldwide become interested in family history and post names and photos on Family Search's databases, the organisation has arranged for flexible cloud computing services to keep operating at peak demand.

Now think about the potential for success disaster at Christmas time. Weeks ago, well before the peak of holiday shopping, Hatchimal toys were already out of stock in many stores. Even though the company shipped additional inventory during December, it recognised that some children were going to be disappointed by not having Hatchimals under the tree in 2016. The message shown at top was a pop-up on the company's home page in mid-December.

Admittedly, predicting the popularity of a new toy (actually, predicting consumer behaviour towards purchasing the new toy) is quite a challenge. But even LEGO, with its long history of sales analysis, wasn't prepared for worldwide demand in 2015. No wonder LEGO 's top executive says: “If you make a decision in product design, you need to mirror it in manufacturing.” That is a major step towards preventing success disaster.

When will UK laggards buy smartphones?

Above, the familiar graph showing how new innovative new tech products are adopted first by innovators, followed by early adopters, early/late majority segments, and finally--the laggards.

What about the pace of smartphone adoption in the UK market? According to experts, the smartphone will reach a penetration level of 80% by January of 2015. That means buyers from the late majority segment are currently adopting smartphones. By the time the laggards get around to buying smartphones, the market will be well into maturity and non-smartphones will be all but finished as mainstream products.

In the UK, smartphone users spend more time on their devices than users in other countries. Content providers are also affected by this penetration level, because more smartphones means higher demand for mobile entertainment, games, etc.

And thanks to this high penetration level, marketers like Sony, Apple and Samsung will be playing a replacement game, which calls for different marketing strategy and tactics (particularly pricing). These three brands accounted for about 75% of the smartphone market in the UK last year.

Already, Apple has debuted lower-priced iPhones, for example. Samsung and Apple are also adding new features (like biometric security) to attract consumers who trade up from older phones.

When will the UK market reach saturation?