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Don't Confuse the Customer: Limit Choices, Make More Sales

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Sometimes, too much of a good thing is just too much.  There’s an argument to be made concerning over-assortments of consumer products in one category after the other. A recent article in Toronto’s Globe and Mail notes, “In store aisles, less is more, but customers can still be particular” and examined this problem at retail.

A gem of a quote sums up the situation. Wal-Mart Ontario chief merchandiser Duncan MacNaughton says, “Folks can get overwhelmed with too much variety. With too many choices, they actually don’t buy.”

Many marketers know that, of course. After the recession began in 2007, retailers made a concerted effort to pull slow turning SKUs from their shelves. The thought process is a good one. Trim costs, reduce customer choices to minimize confusion, and actually boost sales since consumers presented with fewer choices actually buy more.

But even when armed with sales data, culling products from assortments is a tricky business. It’s a hit or miss proposition because a product may not have legions of followers, but the consumers who do love it are likely to revolt if it’s taken off the shelf. The backlash that results is not a pleasant one for the retailer—who is likely to experience lost sales. In many cases, retailers restock a number of those items directly based on customer “feedback."

On the other hand, expertly weeding out assortments leads to good results since it improves customers’ shopping experiences. Unilever’s director of marketing for household products, Rob Persiko, says, “Consumers have a hard time finding what they’re looking for because there’s so much on the shelf.” Isn’t that the best reason to reassess retail assortments?

The article reports that even CPG leader P&G “recently reduced the number of soap and other skin care offerings by about one-third at one retailer, while cutting the array of detergents and other fabric care products by about 20 percent at another chain.” And P&G isn’t alone. Many large consumer product companies are narrowing their assortments as well.

Result of the cutbacks? Sales grew in each category. With customers scanning the shelves in a precious few seconds, having fewer choices definitely makes it easier to shop. The newly merchandised product selection is more visible and clearer. Fewer choices, depending on the category, actually encourage consumers to select and purchase.

Wal-Mart found that out after discontinuing thousands of slow sellers in the United States recently. In fact, the retailer ended up restocking about 300 items it had culled because customers started to shop elsewhere. Yikes! Some categories are just more sensitive to limiting assortments than others, it seems.

Questions:
• Do you feel overwhelmed by too many choices when you shop? Or do you prefer seeing a lot of new brands and having more choices?
• In which categories do you prefer fewer choices? In which do you prefer more?
• Have you ever stopped shopping in a store that offered fewer products? Or has a store that is packed with selections overwhelmed you and turned you off?

I’d love to hear from you.


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Ted Mininni is president of Design Force, Inc. (www.designforceinc.com), a leading brand-design consultancy to consumer product companies (phone: 856-810-2277). Ted is also a regular contributor to the MarketingProfs blog, the Daily Fix.

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  • by Paul Barsch Wed May 26, 2010 via blog

    Hi Ted, thank you for highlighting such an important topic.

    One of the best ways to intelligently reduce customer choice is via analytics. With a firm foundation of historical data and associated infrastructure and applications, a company can meaningfully reduce choice by considering more options than simply "sales" or even customer feedback cards. I talk about how to narrow choice options in a complimentary column to this one titled; "Methods to Systematically Reduce Customer Choice."

  • by Ted Mininni Wed May 26, 2010 via blog

    Thanks for weighing in on this, Paul. Analytics are extremely important when culling assortments. As I stated in my post: "But even when armed with sales data, culling products from assortments is a tricky business." Retailers have sophisticated systems that track sales and turns and profile consumer types as well. Yet, with all of that data, they sometimes get it wrong when they weed SKUs from category assortments. Thanks for sharing your own column on this topic, as well. As you say, it's an important one.

  • by Supriya Sodhi Thu May 27, 2010 via blog

    Hi Ted, really liked what you've written and it feels extremely relevant since i recently had a taste of sometimes too much is just too much.

    I was recently holidaying in Glasgow and one of the big differences (even today) in shopping in the UK versus shopping here in India, is the sheer amount of choice on the shelves. At the end of a tired day, getting a pack of biscuits from a Sainsbury's outlet, was one of the most tiring parts of my day there. Just too much of ever kind of thing!

    When i think about which categories i prefer choices in, i think the stuff that's a passing need like a cold drink or a snack, i like limited choices in since its easy to get confused when purchasing these. However, when i think about beauty products or other things i'm more involved with when buying, i prefer having lots to choose from. It's almost as if i'll also judge the store according to how much choice it offers me in such a category. It could be just a personal choice though and I'm not sure if it's generally true for more or less involved categories.

  • by Ted Mininni Thu May 27, 2010 via blog

    Hi Supriya,

    Thanks for sharing your insights with us. You've pointed to something quite important: not all categories can be approached in like fashion. In some categories, consumers want and expect more choices; in others, they prefer fewer since, as you stated, it's otherwise confusing. Exactly why culling assortments is such a tricky business. You've also made another important point: retail markets in Western Europe and the United States offer seemingly limitless choices whereas those in countries like India do not. Given a bit more time, Supriya, the explosive growth in your country will inevitably lead to a comparable explosion of consumer goods offerings, as well. I appreciate your comments, Supriya; thanks again for weighing in.

  • by Chris Hurtubise Thu May 27, 2010 via blog

    I think we are seeing some very good examples of limited choices creating strong sales when we look at the success of Chipotle, which offers a limited number of ingredients and a hand-full of options, while still allowing endless permutations as the customer combines the ingredients to customize their meal/experience.

    It gives the customer control over their choices, but helps Chipotle stay super efficient in their operations, including speedy service.

    We are practicing more simplification in our operation looking both at the front-line sales experience but also how we communicate the product/experience. We still have a long way to go, but this inspires me to think about strategic pruning.

    Thank you for the post!

  • by Veronica Brown Fri May 28, 2010 via blog

    The same concept applies to B2B. Buyers will put off making a decision if the choices are overwhelming. The big difference is that in B2B, education is a huge part of the buying cycle, so marketers have an opportunity to differentiate themselves as they educate their prospects. In B2C, education is important, but the research phase is much shorter and sometimes made at the point of sale. Thanks for the inspiration for a post on our blog--even though I did make that leap from B2C to B2B.

  • by michael webster Fri May 28, 2010 via blog

    Chris is right to emphasis the control given to customers - it appears to be essential.

    I would recommend that the readers become familiar with Professor Sheena S. Iyengar's work, at: http://www.columbia.edu/~ss957/publications.shtml

    There is far more to this than simply removing choices - you have to make the customers feel in charge of the choice procedure, whether or not you have limited or many choices to make.

    I haven't read her book, yet. But I have read a number of the papers on the site, and think that she is a useful read.

  • by Ted Mininni Fri May 28, 2010 via blog

    Hi Chris,

    Thanks for offering another great example. The Chipotle business model shows how limited offerings make sense when consumers are given the option to customize their choices. You explained the pluses of this business model most articulately. Can't add much more except to say thanks again for adding a superb example to this discussion, Chris.

  • by Ted Mininni Fri May 28, 2010 via blog

    Hi Veronica,

    You're so right: thank you for bringing B2B businesses into this discussion. Firms that service other businesses should cull the list of products and services they offer to focus on a shorter menu of options that highlight their specialties, ie, what they do best. By focusing more narrowly, B2B companies like B2C ones, can do more business. The same rules apply. One of the things companies in either sphere can and should do is to educate, as you put it. Content marketing is hot for a reason. Sharing expertise puts the spotlight on our firms and our capabilities: it makes standouts of us and cultivates more business. Thanks very much, Veronica, for raising the B2B issue. Good stuff.

  • by Ted Mininni Fri May 28, 2010 via blog

    Hi Michael,

    Wow--another strong point made. I love how all of you have added so many important dimensions to my post. It's what makes blogging so worthwhile. Right: regardless what businesses do, it all really boils down to creating consistently good customer experiences. It also comes down to making the customer a partner in the process; by letting them into the process of selecting and choosing and even customizing those choices where it makes sense to, makes perfect sense. The days of speaking to the customer are over; now we engage in conversation together and we must engage in the process of honing in on our product and service selections together, as well. Thanks, Michael, for weighing in here. And thanks for sharing Professor Iyengar's work as another resource for DF readers.

  • by Jill Coyle Tue Jun 1, 2010 via blog

    Veronica - I appreciated your comment on how this article relates to B2B, especially in the area of research and education.
    I am also in B2B (Manufacturer and Exporter of clothing based in China) and I've found this article to be quite true in the China Export arena. When we've given customers too many choices - whether in new clothing styles, colors, materials - they will often take longer in making a decision...or not make a decision at all.
    I liked what Ted said about the fine dance between assortment and culling assortment. It is a very fine line and requires a lot of finesse to get it right with each customer (because no two customers are the same).

  • by Ted Mininni Tue Jun 1, 2010 via blog

    Hi Jill,

    Your statement: "No two customers are the same" is exactly the reason why reducing assortments is a tricky business. However, by offering limited choices but more options to customize them, customers generally respond favorably. The importance of speaking with customers on an ongoing basis and finding out what their needs are can't be overstated. We need insights on what we can do to better service them while honing in on specific products and services the majority of customers are looking for from us. This should yield better results, ie, sales and profits. Thanks for weighing in on my post from the manufacturer's point of view, Jill. It's great to hear from totally different sectors. After all: the question of customer choices isn't unique to the retail industry, is it?

  • by Elaine Fogel Tue Jun 1, 2010 via blog

    Hi, Ted. Although I understand and appreciate the need to "consolidate" and offer only those products that do better, how will this action affect new product launches, especially from newer suppliers in the market category? Wouldn't it be tough to get any shelf space?

  • by Ted Mininni Tue Jun 1, 2010 via blog

    Hi Elaine,

    Thoughtful, excellent questions. Thanks for posing them. To answer your first question: it has always been tough for new suppliers to get shelf space. The cost of entry is high and there are too many "me too" items as it is. How many new product launches have been memorable to you lately, Elaine? That's the point.

    Having said that, shelf space will always be available to ground breaking new products. Innovative items that have great sales potential are so few and far between these days, retailers jump at the chance to bring them in. That simply isn't going to change. Thanks, Elaine, for weighing in. I appreciate it.

  • by Keith McIntyre Tue Jun 8, 2010 via blog

    Bang on ... make things simple for customers, add value to their time and get them on their way. Great article in Strategy June 2010 - P&G Pantene new hair solutions. A good read along these lines.

  • by Ted Mininni Tue Jun 8, 2010 via blog

    Hi Kevin,

    Thanks for your comments. I appreciate your insights. Funny you mentioned the Pantene brand. I just read a similar article about the repositioning of the brand in Businessweek and I'm putting a new post together on that topic! Guess great minds think alike! http://www.businessweek.com/print/magazine/content/10_22/b4180023428465.htm

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