Fewer Products to Choose from Can Lead to Better Sales
American businesses are reducing the number of products that they offer. The change began before the COVID-19 pandemic. It has only increased in recent months.
Reduced offerings
Coca-Cola used to offer around 400 different kinds of drinks. The beverage company recently decided to discontinue half of them. Among the products cut were Tab, Zico coconut water, Diet Coke Feisty Cherry and Odwalla juices.
Other American businesses are reducing food offerings from mayonnaise to cereals. Car companies, too, are offering fewer kinds of cars and instead putting more effort into what they think will sell best.
Stew Leonard’s, a company that operates food stores in Connecticut, New York and New Jersey, has cut the number of cereals it offers from 49 in 2019 to 24.
Edgewell Personal Care Co., the maker of Schick razors and Banana Boat suntan lotion, has cut some kinds of its anti-bacterial wipes called Wet Ones, among other products. Dollar General, based in Goodlettsville, Tennessee, used to offer six different kinds of mayonnaise. Now it offers two.
“The consumer is not going to know the difference,” Todd J. Vasos, chief of Dollar General, told experts in December. “Actually, it’s going to make her life a little simpler when she goes to the shelf.”
Shoppers looking for cars are finding fewer choices as well. Both General Motors and Ford have announced they are limiting the number of option combinations customers can get on their vehicles to reduce manufacturing and purchasing complexity.
A merchandiser arranges clothing at a Kohl's store in Clifton, N.J., Friday, Jan. 26, 2024. (AP Photo/Seth Wenig)
Trends
That is a change of direction from a few years ago when companies aimed to offer more choices. Online shopping caused some to think that more choices lead to better sales. But more choices often do not.
Companies started reducing the number of products they offer a year or two before the pandemic.
During the pandemic, the reductions increased, with companies focusing on necessities as they faced supply problems. After the pandemic, when goods began moving freely again, many businesses discovered less was better.
New offerings made up about two percent of products in stores in 2023. That includes products for beauty, footwear, technology and toys. Market research company Circana said that number is down from five percent in 2019.
Many think the companies are also helping shoppers. Some studies show that fewer choices result in shoppers buying more.
In 2000, psychologists Sheena Lyengar and Mark Lepper published a study that showed limited selection is better for people who are buying things. In their experiment, the researchers found consumers were 10 times more likely to purchase jam when the number of jams available was cut down from 24 to six. Later studies have produced similar findings.
“Retailers are recognizing that they have to be respectful of shoppers’ time,” said Paco Underhill, whose company, Envirosell, studies consumer behavior.
But retailers cannot just reduce offerings without a plan, said David Berliner of BDO, a business services company.
“You want to make these cuts so they’re not even aware of it, and you want the store to still look full,” Berliner said. “If you do it too much, you might scare some away.”
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Words in This Story
consumer –n. a person who buys products for personal use
shelf – n. a flat board which is attached to a wall and on which objects can be placed
option –n. (sales) a choice of car or truck model that has a set group of products that go with it, and which is offered at one of several pricing levels
focus – v. to direct your attention or effort at something specific
selection –n. a group of products from which a person can choose
jam –n. sweet, preserved fruit that is usually put on bread
retailer – n. a person or business that sells things directly to customers
aware –adj. knowing that something is present, available or that it exists
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