LONDON — System1 is leveraging the “wisdom of the crowd” to help food and beverage makers predict which products are poised for success.
The market research company draws on the concept of System 1 and System 2 thinking popularized by behavioral economist Daniel Kahneman.
“People make the vast majority of their decisions using System 1 thinking,” said David Whitelam, commercial director at System1. “It’s fast, emotional responses to stimulus, whether that’s an idea or an advertisement.”
Consumers are less likely to use System 2 thinking, which is more logical and involves deep cognitive processing. Yet many market researchers use a System 2 approach to test new ideas.
“They’ll say, ‘Take a look at this concept. What do you like about it? What don’t you like about it? What does it tell you about the brand?’’’ Mr. Whitelam said. “Consumers don’t ask themselves those types of questions when they’re looking at a product in the store. They’re making decisions much quicker.”
The company’s Test Your Idea platform solicits insights from 500 respondents representing the general population. Concepts are assigned a star rating based on the portion of people who say they would purchase shares in an idea. The rating system has been validated against 230 in-market launches, giving users a high degree of confidence about how a given concept will perform.
Instead of asking participants if they would purchase a product for themselves, the Test Your Idea platform gauges if they think the concept will succeed in the marketplace. System1 also considers the speed at which participants make their decision.
“We look at how quickly people make a buying decision counterbalanced with how slowly they make a selling decision,” Mr. Whitelam said. “Ideally, you want a product that is bought quickly but sold slowly.”
A third metric measures how people feel about an idea. System1 uses FaceTrace technology to detect what emotions a user is feeling and how intensely they’re feeling it.
“You want to cause an emotion, ideally happiness,” Mr. Whitelam said. “Surprise is not always good in food and drink, but it can be okay in certain amounts. Some brands have used the platform to see what they can get away with when it comes to exotic or unfamiliar flavors. Usually, it’s helpful if a new concept is grounded in something familiar but with a slight twist.”
As an example, System1 recently tested several new products landing on shelves this fall. It found Cookie Dough Twix scored high for surprise and is likely to perform well in the marketplace. Cocoa Puffs Popcorn also elicited surprise, with a final rating of 4.3 stars.
Star ratings span from one to five, with one-star ideas considered a “waste” and five-star ideas considered “highly profitable.” Half of the concepts tested on the platform are given a one-star rating. Just 25% receive three or more stars. Five-star ideas tend to have three-times the sales of their one-star counterparts.
System1’s Test Your Idea platform isn’t limited to food and beverage makers, and it isn’t limited to a single step in the product development process. Some companies come with many ideas and use the star ratings to determine which ones are worth pursuing further. Others come with a handful of market-ready concepts and use the ratings to determine which one they should launch first.
Regardless of where they are in the product development process, all users benefit from learning how to best allocate their resources, Mr. Whitelam said.
“Going down dead ends is just a waste of time, and the process is long enough without having to retrace your steps,” he said. “That’s why we like to say, ‘Test early and test often.’”