Photo: Canadian Press
Clothes for sale are displayed at a Kohl's in Clifton, NJ, Friday, Jan. 26, 2024. A year ago, the store had tables filled with sweaters and shirts in a rainbow of colors, as well as racks of dresses packed with a wide variety of styles. Now, it features a more edited approach—tables have thin stacks of knit shirts that cluster into fewer colors, and many racks of dresses have been whittled down to just three or four styles. (AP Photo/Seth Wenig)
How much choice is too much?
Apparently for Coca-Cola, there are about 400 different types of drinks.
That's why beverage company recently decided to discontinue half of themdropping brands like Tab, Zico coconut water, Diet Coke Fiesty Cherry and Odwalla juices, but still leaving around 200 others to choose from.
It's a measure that other companies are also taking, reducing the variety of offerings, from mayonnaise to cereals and cars, and focusing on what they believe will sell best.
Stew Leonard's, a supermarket chain that operates stores in Connecticut, New York and New Jersey, now has 24 flavors or types of cereal, down from 49 in 2019. Edgewell Personal Care Co., maker of Schick blazers and Banana Boat sunscreen , has trimmed certain varieties of its Wet Ones antibacterial wipes, among others. And Dollar General, based in Goodlettsville, Tenn., used to stock six different types of mayonnaise on its shelves and now plans to introduce some of them.
“The consumer won’t know the difference,” Dollar General CEO Todd J. Vasos told analysts in December. “In fact, it will make her life a little simpler when she goes on the shelf.”
Just a year ago, the Kohl's store in Clifton, New Jersey, had tables filled with sweaters and shirts in a rainbow of colors, as well as dress racks crammed with a wide variety of styles. Now, it features a more edited approach—tables have thin stacks of knit shirts that cluster into fewer colors, and many racks of dresses have been whittled down to just three or four styles.
Under its new CEO, Tom Kingsbury, Kohl's has been reducing colors and variations of sweaters, jeans and other items while sending shoppers to the New York market more frequently to bring fresh, on-trend merchandise. .
“We would go out and buy a lot of products and they would arrive 12, 14 months later, and they wouldn’t perform very well,” Kingsbury told analysts on a conference call in November. “We will use the marketplace to be able to react quickly to the business, getting into trends.”
Some customers like the changes so far.
“It's very organized,” said Kimberly Ribeiro, 30, who was at the Kohl's store on a recent Friday. “If you’re not so confused, you won’t be overwhelmed.”
Even in the automotive world, buyers are finding fewer options. Both General Motors and Ford have disclosed how they are limiting the number of option combinations customers can get on their vehicles to reduce manufacturing and purchasing complexity.
This represents a reversal from a few years ago, when there was an explosion of choice, encouraged in part by online shopping that didn't mind space constraints. But that didn't always result in sales, so companies began pruning selections a year or two before the pandemic.
During the pandemic, pruning has only accelerated, with companies focusing on needs while grappling with supply chain obstructions. But even after the pandemic, when goods began to move freely again, many companies decided that less was better and justified limited selection by saying that shoppers don't want so much choice. It is also more profitable for companies because they don't carry so many surpluses that need to be discounted.
Overall, new items represented about 2% of products in stores in 2023 in categories such as beauty, footwear, technology and toys, down from 5% of items in 2019, says market research firm Circana.
Eric O'Toole, president of Edgewell's North American division, noted that the pandemic presented “a really valuable stimulus” for reevaluating the assortment.
“We avoid following fads, as the supply chain and retailer costs required to support shelf access typically do not generate a return in the end,” said O'Toole. “A tighter, more curated portfolio supports healthy earnings management. ”
Many think they're also doing shoppers a favor, with studies showing that fewer options, and not as much variety, actually encourage shoppers to buy more.
In 2000, psychologists Sheena Lyengar and Mark Lepper published a to study which showed limited selection is better for the buyer. In their experiment, Lyengar and Lepper found that consumers were 10 times more likely to purchase jam displays when the number of jams available was reduced from 24 to 6, although they were more likely to stop at the display that offered the most choices. Subsequent studies confirmed this phenomenon.
“Retailers are recognizing that they have to respect shoppers’ time,” said Paco Underhill, whose company, Envirosell, studies consumer behavior.
Still, retailers can't just cut products willy-nilly, said David Berliner, who leads the business restructuring and turnaround practice at BDO.
“You want to make these cuts so they don't even notice, and you want the store to still feel full,” Berliner said. “If you do it too much, you might scare some people away.”
Berliner also believes that reducing variety could also hurt smaller brands that relied on retailers to offer different products – and will send shoppers like Bob Friedland to other competitors.
The 49-year-old communications consultant from Little Falls, New Jersey, said that for years his favorite barbecue sauce was Open Pit. But Friedland noticed that in recent years, his local grocery stores weren't carrying it, and he's since turned to Amazon to buy it. This means these local stores didn't just lose Open Pit sales to Friedland. but all the other shopping he did while buying his favorite barbecue sauce.
“I really don't like the idea of a retailer telling me what I should or shouldn't be interested in,” Friedland said. “I like variety. I like specific brands.”