‘Less is more’ when competing with Amazon

Discussion
Photo: RetailWire
Aug 14, 2018
Chris Petersen, PhD.

Through a special arrangement, presented here for discussion is a summary of a current article from the IMS Results Count blog.

When is too much choice a bad thing? Brain scientists and psychologists have discovered that too many choices overwhelm our brain. Too many choices become intimidating, frustrating and can result in fewer sales. Amazon.com has literally been creating a “store of everything.” Few retailers can afford to compete with the “more” of everything in Amazon’s ecosystem.

However, retailers can offer customers more relevancy and value by narrowing choice through curation.

Barry Schwatz wrote in “The Paradox of Choice“ in 2004, “We can imagine a point at which the options would be so copious that even the world’s most ardent supporters of freedom of choice would begin to say enough already.”

We have reached enough already. My recent search for “smarthome light bulbs” on Amazon yielded over 5,000 product choices! We as consumers cannot begin to read all of the descriptions, specs and customer reviews. The danger for every retailer, even Amazon, is that we become frustrated, fear that we will make the wrong choice and abandon our cart.

Instead of showing and stocking more, retailers must focus on showing less and leveraging curation at a number of levels:

  • Curating assortments: All choice options for both physical and digital retail need to be constantly tested. Less is only more if curation improves customer experience, increases conversion rates and grows sales. The presentation of choice options online and in store also has to be optimized to make it easier for customers to decide.
  • Curating knowledge: The best way to help customers decide is to curate rich content, which illustrates how a product is used by customers in their daily lives. More stuff and details on the product packaging or web product page do not make it better. More photos do not make it better. Customers want essentials.
  • Curating talent: Apple is the epitome of less is more in stores. Its stores are clean, uncluttered and focused on customer experience. However, its real differentiator is in selecting talented people and training them to ask questions that will help customers decide to buy what is best for them.

DISCUSSION QUESTIONS: Is “less is more” a viable approach to differentiating from Amazon and other mass assortment rivals? Do you see other ways successful retailers apply the less is more approach beyond product assortment?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"If retailers want to differentiate, they should focus on enabling shopper objectives, for which 'selling stuff' becomes an outcome. "
"Curation is the ONLY strategy in an Amazon world. Do one thing and do it really well."
"Let's also not forget one VERY important aspect that every retailer can enhance that to this day is not always well leveraged is the store associate."

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30 Comments on "‘Less is more’ when competing with Amazon"


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Bob Phibbs
BrainTrust

I’m sorry, can we stop talking about how all retailers should be like Apple? It’s a design concept unique to Apple. Their “curation” comes down to their product selection which is their brand. Yes smart brands understanding curated product helps customers not feel like shopping is work. The reason you go to Amazon though is that you have every choice there. I don’t see this being applicable across both platforms.

Doug Garnett
BrainTrust

Absolutely. And one of the reasons Apple has a tightly curated set of products is — they make them all. And that’s the real reason for their stores’ success.

Since other retailers don’t make their own (invent their own incredibly unusual and powerful) products, they face a different challenge than Apple.

Sterling Hawkins
BrainTrust

Curation and personalization is important regardless of who is making the products. It’s about knowing your customer and their wants at both an aggregate and individual level. Like the saying goes, you can’t be everything to everybody. Retailers can and should be curating the right kinds of products, promotions and experiences to better service their customers.

Phil Masiello
BrainTrust

The first thing we need to understand is that Amazon is not a discovery platform. 78 percent of consumers know what they are looking for when they go to Amazon. They have already done their homework. They choose to buy from Amazon because of trust, Prime and the A to Z guarantee.

In order to determine the correct merchandising strategy of “less is more” or “more is better” you must understand your customer’s path to purchase. Certainly when it comes to furniture, fashion and food, variety is a benefit. When choice becomes a problem is when the product is complex, like technology. That is why Apple has been so successful. They removed the complexity from technology.

Know your customers and their needs before determining if less is more.

Nikki Baird
BrainTrust
I don’t think it’s about “less is more” so much as doing a better job matching the assortment and the presentation of the assortment to shopper needs. Amazon sells stuff. If retailers want to differentiate, they should focus on enabling shopper objectives, for which “selling stuff” becomes an outcome. For example, I tried out Bright Cellars, which is supposed to match four bottles of wine per month to your tastes based on a quiz that is driven by an AI algorithm. I just cancelled my subscription. The wine was fine. But it was a highly repetitive assortment every month. And for all the technology behind the curation, there was no explanation of why those wines were selected for me. So “less” turned out to be just “less” and not more. I thought I might learn something about my tastes and preferences, and instead I learned that while Obscura reds are okay, they get tiring after six months straight. The curation was not matched to my objective. Curating the assortment is a fine way to differentiate.… Read more »
Art Suriano
BrainTrust
I couldn’t agree with Chris Petersen more. It’s always about doing what you do and being the best at it. That’s how you succeed. We have seen many retailers fall into the trap of trying to be something to everyone and that’s not feasible. A brand is strong when customers can identify with what the brand represents. A brand is successful when the unique products speak for themselves as must-haves and when the service associated when purchasing the products is unsurpassed during the purchase and after. Retailers who have followed these practices are the ones who have been and will remain successful. Today there are too many copycats. Marketers have gotten away from the basics like taglines and slogans because it’s easier to be nothing that something specific. The retail leaders have sacrificed staffing enough people and training them arguing that is how they can keep prices down without sacrificing the almighty corporate executive bonuses. These practices must change, and retailers need to get back to the basics. Decide whom you want to be, who… Read more »
Bob Amster
BrainTrust

Selective assortments can be a weapon against Amazon, and they will work in certain categories. We have all heard the sentiment of not trying to out-Amazon Amazon. That won’t work for any company except possibly Walmart, so why clutter your website with thousands of items?

Lyle Bunn (Ph.D. Hon)
Guest

Chris is right on the mark in describing the importance of curating available options. Isn’t that the great promise of AI? Information is powerful when used to fuel a buying decision and generally we have seen very little information presented by product providers. Contextual content is, I believe, the next plateau of digital commerce.

Mohamed Amer
BrainTrust

Less is more is absolutely a viable and important strategy when competing with a formidable competitor. You can’t compete with Amazon on depth or breadth of assortment and all the related infrastructure they’ve built up over the past two decades. However by truly knowing your customers, their needs and behaviors, and delivering a fresh and interesting shopping experience that engages in the moment and enhances your relationship with them — you can differentiate and compete.

Don’t try to be everything to everyone, but seek to be indispensable to a sufficiently large niche to support your business; this not only offers a defensible moat, but can prepare you to take measured steps to expand profitably.

Dr. Stephen Needel
BrainTrust

Less is more is not a viable strategy per se — it works when you have an overwhelming number of choices and little differentiation. Having 18 colors of polo shirts is fine if they are different. When you have 18 brands of the same-looking polo in the same 18 shades tha’s when Chris’ point kicks in. Stores like Trader Joe’s get away with a limited assortment in some categories because a.) their shoppers don’t expect a lot of assortment and b.) sometimes there’s a limit to what you need. That said, they offer a big wine and cheese assortment, lots of nuts and snacks, etc. — not everything is limited.

Brandon Rael
BrainTrust
Curated assortments aside, in the new retail world less is absolutely more. The main motivators for consumers to go to a physical location are the curated and value-added experiences that they would be unable to achieve from a pure digital journey. I believe that the last two bullet points, curating knowledge and curating talent, are the main competitive differentiators for any brick-and-mortar or digital-native companies with physical store expansion plans. The Amazon value proposition and ease of shopping will always be there, and perhaps it’s the default option as your starting point. Yet, it’s the value-added store associate/brand ambassador one-on-one experience which consumers really enjoy. If that brand ambassador is also passionate about the product and drives the experience, regardless of what tools they use, then you have a winner. Store formats truly matter as well. Mixed-use spaces are driving the market these days. Perhaps the customer just wants to spend an hour or two at the store without buying a product. By having cafes or areas to connect in the store you help to… Read more »
Evan Snively
BrainTrust

Analysis paralysis is certainly a very real thing, but Amazon helps its consumers overcome a major part of that barrier — the fear of making the wrong decision — with their ultra-fast shipping and lenient return policy. While curated collections will help in some industries, retailers who wish to compete directly with Amazon need generous return policies as well.

Charles Dimov
BrainTrust

Yes I like the idea of dropping the clutter. This works, as long as you are showing the customers the right things. Apple is a great example of clean, crisp photography, lack of clutter and purity of simplicity. They also focus on the right photography and information. When purchasing computers, I have often wanted to see the back connector panel. Yet I have often been dismayed that the photography was not crisp enough. In this case, missing this photo became a show-stopper for my purchases.

Lesson: YES to uncluttering. But make sure to give customers the information they really need (photos and all).

Dave Wendland
BrainTrust

Yes — less is more! For any brick-and-mortar retailer who is not purposefully examining the relevance of their assortment to their customer base, their road is not only rocky it is dangerous.

Last week I presented on this topic during an ECRM event in Phoenix — here’s the post interview. My message was simple. Ensure that 1.) the assortment curated properly; 2.) it is aligned with the retail mission; and 3) the team is well-prepared. Very similar to Chris’ views and comments.

Neil Saunders
BrainTrust

Consumers want choice, but they want that choice to be edited. Editing takes two forms. First, it is curating so that products are coordinated. Second, it is personalization so that products are relevant.

Doing this in-store, where one uniform space has to serve lots of different customers is challenging. Although not throwing loads of products out there in a sea-of-merchandise approach (as many retailers still do) is critical. However, digital platforms allow much more creative solutions to present an edited choice, and retailers should be making full use of this.

Peter Charness
BrainTrust

Phil has it — the vast majority of purchases on Amazon occur when someone has already determined what to buy. One might suggest that shopping is probably happening elsewhere, transacting is what occurs on Amazon (after all, try “shopping” that website. It’s not a beautiful experience at all).

The safe long-term play is to have a brand and an experience that shoppers want to interact with; one that you can edit, price and control. Amazon is a mall, not a store, unless you’re buying an Amazon brand in which case they are also a supplier to that mall. The only way to control where that transacting takes place is to be the brand owner.

Paula Rosenblum
BrainTrust

Relevance is everything. So is “less is more” a viable alternative? Absolutely, as long as the “less” is consistent with a lifestyle approach. I think the outdoors guys like L.L.Bean and REI had this right from the get-go. Everything for the enthusiast. Whole Foods made its bones on organic and local and trust.

I’d love to see something similar in apparel (though I suppose some would say that’s why we have specialty stores).

But yes, Amazon’s breadth can work against it in many ways. Unfortunately you have to stay close on price, since it will always be a price comparison site, at minimum.

Doug Garnett
BrainTrust

I agree with the need for a “less is more” approach and have observed that the “endless aisle” theory of many retailers sounds like something from a store in a horror movie.

That said, it’s not going to be easy. Home Depot has been pushing hard on an endless aisle approach. At this point, we can’t say it’s working against them (see today’s quarterly report).

So the power of “less is more” will take considerable insight and cleverness to leverage.

Susan O'Neal
BrainTrust
6 months 5 days ago
The power of Amazon’s infinite shelf is that whatever the customer wants, Amazon has it or can get it for them — quickly and efficiently and likely at a great price. Amazon doesn’t even try to manage or even strategize assortment as a competitive advantage, they simply annihilate anyone else’s ability to make assortment a competitive advantage (similar to the way Walmart used EDLP to significantly harm any other retailer’s ability to claim “value” as a competitive advantage). There is virtually NO barrier to any product making it onto Amazon’s virtual shelf (compare that to what it takes to be carried by a brick-and-mortar retailer). The ONLY way for a traditional retailer to compete (with Amazon) on assortment is to leverage their own customer data to get really, really, really good at category management and merchandising (has anyone invented the term “precision merchandising” yet?). More broadly accessible competitive strategies are to focus on getting closer to the customer, co-opting them so to speak, to maintain their preference (assortment is one factor of preference, others include… Read more »
Jeff Sward
Guest

I use the 5R’s … Right Product, Right Price, Right Place, Right Time, Right Quantity. Alliteration has its moments, but your term is so much more efficient!

Ralph Jacobson
BrainTrust

Although shopper studies have shown for decades that consumers want large assortment, actual purchase behavior invariably shows the old 80/20 rule that 80 percent of revenue comes from less than 20 percent of SKUs.

Ray Riley
BrainTrust

Supply matters. If you’re selling commoditized products such as in the light bulb example, than having a plethora of options conveys trust. Perceived differentiated products, such as MacBook Pros, iPhones or iPads on the other hand have perceived value built-in and require no comparison unless it’s to an adjacent internal product category (iPhone/iPhone Plus). It is an entirely different model, and one that has been over twenty years in the making since the first store in 2001. Apple drives so much revenue out of their stores, and they offer virtually zero customization on their computer product line for cash and carry retail customers. What does that tell you?

Jeff Sward
Guest

Before the conversation even involves Amazon, “less is more” is probably the right strategy for most mall retailers. I was in the mall three times a week during 2016 before spending 2017 in China. The retailers in the most trouble, Aéropostale and New York & Company. for instance, were trying to solve their problems with “more.” Aéropostale went bankrupt. I suspect New York & Company came close. I am now back in the malls and both Aéropostale and New York & Company are operating with 20 percent to 25 percent less inventory on the floor. Stories are focused and actually readable. I can’t say how Aéropostale is doing as it is now private, but New York & Company has bounced from about $1 per share to more than $4 per share. The constraints of space, attention span and (human) bandwidth are real. Deal with it.

Lee Peterson
BrainTrust

Curation is the ONLY strategy in an Amazon world. Do one thing and do it really well. Why do we think department stores or J.C. Penney are doing poorly? Or why do we think Walmart and Target are scrambling to compete? They do many things just OK but, at the same time, get their butts kicked on the convenience side, which is trouble in spades in today’s retail environment.

One good example is pour-over coffee. There have been four or five coffee shops opened in Columbus, Ohio (yeah, Columbus) in the last couple of years. Lines out the door. Opening more stores. Why? They do one thing and man do they do it well.

Having said that, are you going to compete on the 100 billion to trillion dollar level with that strategy? I guess you could ask Apple and see if it’s possible.

Jeff Miller
BrainTrust

The paradox of choice is a real thing for many shoppers. It used to be felt more in department stores or big box retailers like Walmart and in some cases going “shopping at the mall” in general. Amazon and global e-commerce overall certainly add to that felling.

There are certainly opportunities for retailers to focus on less to compete. Stitch Fix which has a huge assortment of apparel does a good job of using people and tech to curate assortment and knowledge. Brandless, with limited inventory, is another good example. The rise of subscription focused retailers across many categories also strive to combat the paradox of choice by focusing on value, replenishment, curation, discovery, surprise and a sense of “belonging” when done right.

Ricardo Belmar
BrainTrust
I like to think of this as not being about that too much choice is overwhelming, but delivering enough choice that the shopper feels satisfied with a purchase, feeling they made a knowledgeable, well-researched decision. Of course, this isn’t necessary for every product category. The same amount of consumer research does not go into buying a laptop versus a new shirt. So is “less is more” the right strategy? Like so many things in retail, it’s not a simple answer — it depends on many variables, including product mix, customer profile, and shopping journey. All of those are at play in this process. Can better curation be a good battle plan against Amazon, for certain product types? Yes, it can. Every retailer cannot be the “everything store” Amazon represents. Unless your name is Walmart. So retailers have to find ways to deliver what the customer wants while making the customer feel like they made a great choice, without feeling like they needed to go through Amazon’s 5000 choices in that product category. Let’s also not… Read more »
Bill Hanifin
BrainTrust
Retailers have a unique set of assets to muster in defense of their turf against what some see as a hopeless battle with Amazon, Walmart, Alibaba. The key is to not try to offer everything to everyone, but to focus, specialize, and go deep in areas they know very well. At the recent WPP Global Retail Forum, I heard someone describe the new retail as flourishing at the “crossroads of hospitality, leisure, and shopping. Think about physical stores as “test beds,” “idea pads,” “meet-ups,” “venues,” even an oasis of enjoyment in a very busy world, and you might see where retail can prosper. There are smaller e-tailers, Hammer Nutrition is one that comes to mind, that lead with product knowledge. They educate and inform and in the process build confidence in the products they sell. Endurance athletes trust the Hammer brand as result of this process and might even pay a premium for products in recognition of the knowledge shared. I believe the more Amazon expands (especially into new categories), the more likely consumers will… Read more »
Larry Corda
Guest

A “less is more” concept is absolutely necessary for brick and mortar stores to compete against Amazon. It’s easier to keep items in stock and easier to train employees on new products. If I’m going to purchase a 55″ TV, I don’t want to go into a store and have to choose between 20 different models with price points varying only a few dollars on over half of them. Instead, I expect the retailer to narrow down the selection for me. The price points and features should be noticeable different in the assortment so it’s easy for the sales person to sell it and the customer can to understand the differences (price/quality/features).

Ronald Bolling
Guest
6 months 4 days ago

“Less is more” as long as you understand who your customers are and why you are different from your competition and can articulate to your customers why they should buy from you. If you lose sight of this you can become less is just less.

Chris Weigand
Guest
6 months 3 days ago

Less is certainly more. Retailers are now curators, that’s their whole reason for existing. Customer service, thoughtful curation and instant gratification. Otherwise consumers have the world at their disposal online. Mass assortment in one category isn’t necessary in store, but I will say mass assortment in terms of categories can be a unique differentiator. Capture consumers that need something ASAP so that drives them to the retail store, then satisfy their need by having at least one of whatever thing it is they need. Walmart does this well — e.g. open 24 hours so when you absolutely need a marine battery at 2 a.m. on a Sunday morning (true story).

wpDiscuz
Braintrust
"If retailers want to differentiate, they should focus on enabling shopper objectives, for which 'selling stuff' becomes an outcome. "
"Curation is the ONLY strategy in an Amazon world. Do one thing and do it really well."
"Let's also not forget one VERY important aspect that every retailer can enhance that to this day is not always well leveraged is the store associate."

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