Do switching costs really provide a first‐mover advantage?

The purpose of this article is to present a model that compares the switching costs that consumers face when they buy pioneering and follower products.

A study of 255 new products indicates that switching costs are actually higher when switching from an existing product to a pioneering product.

The study shows that people who buy a pioneering product may also face switching costs, if the pioneering product is launched in an existing category where consumers are already familiar with similar products.

The results help to reinforce the view that first movers have advantages and demonstrate that switching costs do not lead to a higher level of consumer retention.

This study provides interesting managerial implications on how to launch new products more effectively when they suffer from switching costs..

Researchers commonly view switching costs as a barrier to market entry that protects enterprises that launch pioneering products and gives them a competitive advantage over those that launch follower products. The underlying idea is that people only experience switching costs when they change to a different follower product, rather than when they purchase a pioneering product instead of the product that they usually purchase.