Show Loyalty Through Selection
By John Hennessy
Author and professor Barry Schwartz shared his thoughts on variety with the Annual Conference for Catalog, Internet and Multichannel Merchants in Chicago recently. Professor Schwartz opined that offering shoppers a greater variety of choice doesn’t necessarily lead to more sales.
According to Professor Schwartz, researchers are discovering that too much choice can cause shoppers:
- Not to buy,
- To make poor choices,
- To feel dissatisfied with the choices they make.
In research he conducted, Professor Schwartz noted that, contrary to what was expected, a decrease in the variety of items carried in the catalog of an office supplies company resulted in an increase in sales, margin and profit. Increasing the variety decreased the results.
As other evidence of an emerging awareness of the negative impact of too much variety, Professor Schwartz points to Procter & Gamble’s reduction in variety across categories and the subsequent sales increases in those categories. He also notes Trader Joe’s success based on a very limited selection of items.
According to Professor Schwartz, the goal for marketers should be to find the sweet spot where the number of options enhances the quality of life for consumers and doesn’t detract from it.
Moderator’s Comment: What are brands and retailers doing to demonstrate loyalty through product filtering and selection?
A band I enjoy is difficult to describe. Rather than work to develop a distinctive sound, they’re all over the place. If you know to expect random acts
of music, that’s fine. But try and convince someone to join you and you have nothing to hang your hat on – too much variety.
I have argued the band would be better served, their shows better attended and their fans more routinely pleased if they would lock into one of their many
styles and own it.
Retailers and brands face a similar challenge. They want to make sure they have what you need when you need it, but fail to understand that what you need
is often someone to save you time by selecting what you need on your behalf.
A number of retailers do a terrific job of filtering products on behalf of their customers. Shoppers shop there because they know the store works for them.
They don’t have to work so hard to make sure what they purchase is going to be of high quality. These stores earn loyalty through careful product selection on behalf of time-starved
Good brand marketers, such as P&G, go through similar exercises in filtering on behalf of their customers. When products in their portfolio become less
distinctive, those lines are shed. They are also careful in the product lines they add. Shoppers select products from these marketers in part due to this continual product filtering
that assures them quality products and saves them time. – John Hennessy