A few days ago, The Atlantic ran an article titled “The Kindle Problem.” In it, author Kevin Maney gives his thoughts on why many consumers have not yet purchased one of Amazon’s e-readers. His basic premise is that when developing products, companies should focus on either providing an excellent experience or being extremely convenient -- but not both. He states:
...in aiming to provide both a great experience and supreme convenience, [the Kindle] has achieved neither. And unless it can be revamped to truly distinguish itself, either as the best reading experience around (superior to the old-fashioned book), or as the cheapest and most convenient reading outlet available, it may be doomed to fail.
Maney continues by stating that Amazon’s pursuit of both elements has required the company to charge a price too high for the majority of consumers. While this has some merit, such a view is far too simplistic to be useful. After all, those companies following Maney’s advice have sold far fewer devices than has Amazon.
This is not to say that price does not matter. It does. Price undoubtedly has an impact on purchase decisions. However, as Everett Rogers describes in his research and in his book “Diffusion of Innovations,” consumers’ adoption of innovation is impacted by numerous factors. According to Rogers, a new innovation’s rate of adoption can largely be explained by five variables: the perceived attributes of the innovation, the type of innovation decision, the communication channels used, the nature of the social system, and the extent of change agents’ efforts.
Within these five variables, Rogers identifies the perceived attributes as being most significant. These attributes -- relative advantage, compatibility, complexity, trailability, and observability -- together tend to explain anywhere form 49 to 87 percent of variation in consumer adoption of a new innovation.
When interpreted through this framework, Maney’s argument centers around the Kindle’s relative advantage, with a heavy focus on economic costs. However, Maney’s focus on these costs does not include proper attention to perceived benefit or to the other sources of relative advantage. Rogers states:
Diffusion scholars have found relative advantage to be one of the strongest predictors of an innovation’s rate of adoption. “Relative advantage” is a ratio of the expected benefits and the costs of adoption of an innovation. Subdimensions of relative advantage include economic profitability, low initial cost, a decrease in discomfort, social prestige, a saving of time and effort, and immediacy of reward.
In other words, consumer behavior cannot be explained through a dichotomous product development strategy of providing experience versus convenience.
