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As the old adage goes, sometimes less is more. This concept is taking root within the retail and consumer goods sectors, where companies are strategically reducing their product offerings.
Leading the charge, Coca-Cola has made the decision to halve its drink choices, eliminating 200 drink types including familiar names like Tab and Odwalla juices, leaving customers with approximately 200 remaining options.
Across various industries, from grocery stores to personal care, a similar pattern is becoming more prevalent. Companies are culling lesser-selling products to concentrate on their top performers, a strategy they believe benefits both the brand and the consumer alike.
At Stew Leonard’s supermarkets in the tri-state area, cereal selections have been cut in half, to 24 from 49 in 2019. Edgewell Personal Care Co. and Dollar General are similarly streamlining their assortments in categories such as wipes and mayonnaise.
Dollar General CEO, Todd J. Vasos, believes that this reduction in variety will simplify the shopping experience, suggesting that consumers might not even register the change. Meanwhile, Kohl’s in Clifton, New Jersey has adopted an ‘edited approach’ in its presentation of apparel, with Kohl’s CEO Tom Kingsbury affirming a shift towards agility and trend responsiveness within their procurement strategy.
Auto manufacturers such as General Motors and Ford are also riding this wave, offering fewer customization options in an effort to streamline production.
This trend, which predates the pandemic, gained momentum as supply chain issues forced a focus on essentials. However, even post-pandemic, many firms are maintaining the ‘less is more’ approach for its profitability and the perceived consumer preference for simplicity.
Indeed, a landmark 2000 study by psychologists Sheena Lyengar and Mark Lepper supports this, illustrating that consumers are more likely to make a purchase when choices are narrowed.
While overhauling product lines, retailers are being cautioned to maintain the perception of variety and abundance to avoid alienating customers who value choice, like Brian Friedman, a loyalist to a specific brand of barbecue sauce who has since shifted his patronage online due to its unavailability locally.
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The Associated Press Business Writers Dee-Ann Durbin and Tom Krisher, as well as Anne D’Innocenzio, have contributed insights into this evolving retail strategy.
For more information, follow Anne D’Innocenzio on Twitter: http://twitter.com/ADInnocenzio
FAQ Section
- Why are companies reducing their product offerings?
- Companies are reducing their product offerings to focus on their best-selling items, simplify the shopping experience for consumers, and increase profitability by reducing the need to discount unsold inventory.
- Which companies are known to have reduced their assortments recently?
- Companies like Coca-Cola, Stew Leonard’s, Edgewell Personal Care Co., Dollar General, and major automobile manufacturers such as Ford and General Motors have been identified as reducing their product assortments.
- Does reducing the number of choices actually benefit consumers?
- Studies, including the one conducted by psychologists Sheena Lyengar and Mark Lepper in 2000, have found that consumers are more likely to make purchases when faced with a smaller number of choices, suggesting that a curated selection can benefit consumers by making decision-making easier.
- How has the COVID-19 pandemic affected product offerings?
- The pandemic accelerated the trend of reducing product offerings as companies had to focus on essentials due to supply chain disruptions. Many businesses decided to continue with fewer options even after supply chains normalized.
Conclusion
The retail landscape is witnessing a paradigm shift where businesses are consciously downsizing their product lines in response to consumer behavior and operational efficiencies. Whether this strategy of offering fewer choices will continue to prove advantageous remains to be observed, but the current trajectory suggests that the philosophy of ‘less is more’ may indeed have more merit than previously thought within the context of consumer economics.