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Consumer Malady of 2012: Upgrade Fatigue

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Despite weak December sales in electronics, analysts say retailers should be careful about rolling out new gadgets too fast or too soon — especially if the upgrades aren’t up to scratch.

As SmartMoney.com reported, analysts say consumers are bored with the current crop of gadgets on store shelves. But many pros, including Seth Rabinowitz, a partner at management consulting firm Silicon Associates, say people won’t part with their cash in 2012 unless they’re wowed by cool new features. “There is upgrade fatigue,” he says. Scott Sutherland, a senior analyst with Wedbush Securities, agrees, pointing out how poor sales were last year for 3D TVs, despite all the marketing. 

Electronics are usually a sure-fire hit over the busy holiday season, but despite offering steep discounts in many categories, many big box retailers have been left polishing unsold gadgets this January. At Best Buy, televisions posted a mid single-digit decline. At Costco Wholesale, TV sales fell by double digits on the year in December, while Target also reported lower demand for electronics.

Some stores say it’s the weak economy, not upgrade fatigue, that has hurt sales. Kristy Welker, a spokeswoman for Target, says electronics sales were softer than the company had expected in December, but she says the company will continue to pursue initiatives “designed to deliver compelling value” against the backdrop of continued slow and volatile economic growth. (CostCo did not return calls or emails seeking comment.)

Other stores have acknowledged that consumers aren’t spending, but because they are waiting for the next big tech wave. A spokeswoman for Best Buy cited a letter issued by Brian J. Dunn, Best Buy CEO last Friday, in which he said: “We’re in the midst of a generally flat technology curve which is driving contraction in our industry, and providing us with fewer must-have products in many of our key product categories.”

A case in point: The last round of 3D TVs wasn’t enough to redefine the category. Slimmer, wider and/or marginally better picture quality is lost on most recession-scarred consumers, especially given the weak economy, says Louis Ramirez, senior features writer for dealnews.com. An upside: Upgrade fatigue likely means deals on older and even some newer TV. “Stores have to move the 2011 models to make way for the 2012 stock,” he says.

Even with smartphones – which most often upgrade their software – consumers are increasingly cautious. They are ripe for upgrades because they crack and newer versions only work with some of the hottest new apps. However, expect consumers to take pride in holding onto their old one. “With 4G-capable phones consumers are being pressured to upgrade their phones more frequently,” Ramirez says, but they’re growing wise to the chicken-and-egg approach to the marketing of smartphones and “must-have” new apps.

Apple has tested the patience of its most loyal customers. There were widespread reports about the gimmicky nature of Siri on the iPhone 4S when it was released last year and customers complained about the short battery power. As SmartMoney.com reported Monday, a Boston-based social media analysis firm, Crimson Hexagon, recently scoured the opinion of over one million Tweets: 11% mentioned that the battery drained too fast.

But Apple’s strong pipeline of new products may only last as long as the slightly older iPhones and iPads maintain a strong re-sale market, experts say. (Apple did not respond to a request for comment.) Expectations are high among consumers spoiled by dramatic innovations in iStuff, says Yung D. Trang, president of TechBargains.com, but budgets are low. “Consumers will upgrade if they can perceive the value they are getting for the extra dollar,” Trang says.

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    • By WebOsPublisher

      Case study with many examples of how to improve the usabilty and recognizability of a family of icons for a home page design.
      Icon Usability
      useit.com
      Papers and Essays
      1995 Design for Sun
      Icons
      | Search
      Icon Usability
      Icon usability testing was conducted with two different methods:
      Icon intuitiveness test in which an icon was shown to a small number of users (typically five) without its label. The users were asked to state their best guess as to what the icon was supposed to represent. This test assessed the degree to which the graphic chosen for the icon represented the intended concept.
      Standard usability test in which the icons were shown to users as part of the full user interface and where the users were asked to “think aloud” as they used the system to perform set tasks. This test accessed the degree to which the icon would work well in context of the interface as a whole (where it would typically be displayed with a label).
      Our initial studies were done with simple sketched icons in black-and-white ink on paper. For each icon, several alternative concepts were tested and we chose the most promising one for further development into a color icon rendered as an imagemap on the computer. The color icons were further developed through several rounds of iterative design.
      Here are examples of the iterations of three of our icons.
      This icon represents the concept of Technology and Developers.
      The first two icons with a chip and a CD-ROM were somewhat too hard to understand and seemed to represent the finished products more than the development phase. The construction worker was good at representing development but was rejected due to the strongly negative connotations this symbol has on the WWW where it is often used to represent pages that are “under construction” (something that was much hated by our test users).
      The second row shows our next round of attempts where a person was used to represent the developers. As you can see, we couldn’t restrain ourselves from having a propellerhead despite the fact that we had rejected this aspect from the first iteration of the home page. The first developer icon was liked the most, though some commented that it represented hardware and not software development. Also, some people liked that the second icon represented “harnessing the power”. So for our first color icon, we chose mainly the first developer icon but with the wrench replaced by the lightning bolt.
      The first color icon met with poor results in usability testing, though. Comments included:
      thunder and lightning
      electric – looks painful
      person being killed by technology
      dance machine
      why do Sun developers look bug-eyed?
      We clearly had to get rid of the human in this icon, and for the second color icon, we retained only the lightning and the cogwheels. Users still complained that the thunderbolt looked too much like lightning striking the machinery and destroying it. We finally decided to get rid of the references to electricity and the final design represented the concept of development by a CD-ROM. Throughout the testing, the cogwheels worked fine as a way of communicating engineering and technology even though computers obviously don’t have gears. Sometimes elements of obsolete technology can work well as a stereotype to communicate concepts in an icon.
      This icon represents the concept of Products and Solutions.
      I personally liked the machine coming out of a box the best, but it had to be rejected because it only represented hardware and not software (nor, of course, the idea of solving problems for the customers and not just selling them products).
      Some users liked the man holding up a computer because “it says strength and power – I can do it for you.” However, the icon was very busy with the large number of computers behind the person (of course, we hope to sell that much, but even so, icons should be simple!). Nobody liked the guru and most of the people we asked liked the light bulb. One problem that was mentioned by a few users was that the man holding up the computer was indeed a man and not a woman, We briefly considered that we could use some mix of men and women if we had an icon family with people in most of the icons, but in the end the desire for simplicity resulted in icons with no humans in them.
      As you can see, all the versions of the color icon were essentially the same since the computer with a light bulb going on was easily recognized by all users as representing some combination of computers and bright ideas (the Sun solutions!). The light bulb did double duty as representing software (something on the screen) and solutions. The only changes to this icon were those necessitated by the changes in home page layout: first the icons were made slightly smaller and then they were made to look more like (slightly three-dimensional) buttons.
      This icon represents the concept of Sun on the Net.
      We initially had two different ideas: a talking server (telling you about itself) and world-wide communication. Most users thought that the world icons represented footballs (after a few failed attempts at color icons we finally recognized the simple truth that a world had to be round!).
      We rejected the overly anthropomorphic servers and chose a metaphoric style for our first color icon: a literal server serving information on a silver platter. Unfortunately, the users thought it was a pilgrim’s hat. Also, of course,
      this literal interpretation of the word “server” would have failed international
      usability testing.
      We then combined the idea of a world with the idea of a speech bubble, but users thought it was a punctured balloon. The next two icons were attempts at a more literal globe, but users interpreted them as an astronaut in a space suit, an olive, and “a golfer trying to hack his way out of the rough.”
      The final icon is simplified to the utmost – and it works.

    • Unknown message

    • Take my word for it: Financially I’ve had a pretty good year, generally I’m an “early adopter” and my current TV’s (6 of them) are putting on age, but I see nothing in the current crop of electronic offerings to caused me to buy new. I do have hopes for iPad 3.

    • A lot of technology has fractured off onto several tangents. The industry in one way is working against itself by frequent product roll-outs. Many consumers still don’t get the difference between 1080i and 720P. Then there’s all the myriad of ‘new standards’ for cables and inter-connectivity. You wonder if the new DVD player will work with your TV. Will Blu-ray work with 720p? Or should I buy a video recorder with a hard drive? Are CD and DVD disks going to disappear? And how fast? What about wi-fi for the TV? Will my next purchase be obsolete in a year or two? USB 2 or wait for USB 3 as a standard? Thunderbolt or HDMI? Lots of things to think about, and also the economy to worry about. Yes, I’d say it’s time to slow it down a bit. Lots of consumers are still stuck in the learning curve. I have no idea myself at this point what I’ll be handing my kids to maintain the family history such as movies and photos. It looks like it will change three to five more times at least.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.

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