By Dr. Kyle Murray
Have you noticed the motorized scooters that now appear beside the carts at the entrance of your favorite big box retailers? Some stores are so big that scooters are needed by many consumers to complete their shopping trip. Today numerous large format stores offer more than 50,000 unique items, a few now stock over 100,000 different products. In an effort to provide the products that best match your specific needs, these stores have dramatically expanded the number of items that they carry and the space to display them.
If deciding among all of these alternatives gives consumers a headache, a trip to the local pharmacy does little to relieve the pain. Even in product categories that one might consider relatively simple and straightforward, such as analgesics, it is common to find in excess of 60 different varieties side-by-side on the shelf. We are asked to select the chemical composition (ibuprofen, acetaminophen, acetylsalysic acid), decide between brand names (Advil, Tylenol, Aspirin) and generics, and choose from numerous features (“cool burst,” coated, time release), packaging (liquid gel, tablet, caplet, the number of pills) and concentrations (regular, extra strength).
Why so much choice? Because that is what consumers have repeatedly told retailers they want. We have voted with our wallets. We do not want a corporate buyer at head office to decide what product features are best for us, we want to see all the combinations and then decide.
All this choice, in fact, may be having a negative effect.
Research suggests that although we are attracted to larger assortments, we are often happier with our purchases when we buy from smaller selections. In Paradox of Choice, author Barry Schwartz notes that when we have to choose from many options there is more to regret in what we did not select. When the differences between products are smaller, we are less certain that we have chosen the right one. If you love pecan pie, it is easy enough to choose between pecan, apple and cherry. But, if a dark chocolate pecan pie and a white chocolate pecan pie are also available (and in a variety of sizes), are you really sure that you made the right choice
when you brought the 8 inch plain pecan pie home for dessert?
In addition to liking a variety of products to choose from, we also like products with lots of different features. Researchers from the University of Maryland’s Center for Excellence in Service have demonstrated that this can lead to “feature fatigue.” That is, we tend to choose the products with more features even though we would have been happier with an easier to use alternative (with fewer features). Ultimately, this hurts both consumers and
retailers. Consumers are less satisfied because they pay for features they don’t or can’t use. Consequently, they are less likely to shop at the same store in the future. This in turn hurts retailers.
It is much more profitable to serve a happy and loyal customer base than it is to win back unhappy clients.
It seems highly unlikely that we as consumers are going to suddenly decide that it is in our best interest to have fewer choices. Most of us will continue to be attracted to stores that offer us a variety of pain killers rather than one or two options. We will prefer the grocery stores that give us a selection of different varieties of ripe tomatoes over those that offer just Romas. Our toothpastes, cell phones, cars and other products will continue to add more features – and we will likely choose them over the basic alternatives.
But, we are not going to be happy about it unless retailers do more than just put the products on the shelves.
My research suggests that retailers are going to have to become better advocates for their customers. The big box stores with enormous selections will need to help people make choices. They will have to continue to simplify store navigation and take advantage of emerging technologies that improve the shopping experience. This will likely include the mass customization of products and services, without adding to consumers’ decision making burden. Innovations along these lines are well underway, from stores-within-a-store to more efficient check-outs. To get a glimpse of the next wave of innovation, Google the Metro Group’s store of the future or Mi Adidas Paris.
For those concerned about how the small independent retailer will be able to compete against ever-expanding international chains employing cutting edge technology, there is no need to worry. Successful small retailers have always made life easier for their customers. Not by having the largest selections, best locations or lowest prices, but by anticipating what their customers will want and building relationships around smaller selections.
Dr. Kyle Murray
Dr. Kyle Murray is the Director of the School of Retailing and an Associate Professor of Marketing at the University of Alberta’s School of Business and a friend of Retail Prophet