It turns out that consumers spend more when there are fewer product choices

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Ternyata, Konsumen Belanja Lebih Banyak Saat Pilihan Produk Lebih Sedikit

In the minds of manufacturers, fewer options will make consumers’ lives simpler. Various brands are reducing their product catalogs.

Until early 2023, the arrangement of the Kohl’s franchise space in Clifton, New Jersey, can be said to be irregular. Tables are filled with various colored sweaters and shirts with patterns, resulting in full clothing racks.

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Now, its arrangement is neater after the plan has changed. There are a few tables with a few piles of limited choices of knitted shirts as the view inside the store. The same goes for the clothes racks. Only a few hanging clothes, perhaps three or four types, with a well-kept distance from one another.

Reported by Associated Press on Tuesday (2/13/2024), the change was felt after a change in management. Under the new CEO, Tom Kingsbury, Kohl’s reduced the color and variety of clothing and other goods. On the other hand, they also introduced new and fresh products that are favored by New York consumers.

In a statement at the end of 2024, Kingsbury mentioned that Kohl had previously accumulated too much inventory in the warehouse. The storage and production lasted up to 14 months, but the results were unsatisfactory. Now they are trying something new by entering the local market. “We can respond more quickly and agilely to trends,” he said.

Several customers appreciate the refurbishment carried out by Kingsbury. “It’s fairly organized. If it’s not too messy, you won’t be overwhelmed,” said Kimberly Ribeiro (30), a consumer, on Friday (9/2/2024).

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Kohl is not alone. Several brands from the food to automotive sectors are also streamlining their products and catalogs. Stew Leonard’s, a supermarket chain with stores in several major US cities, has decreased the variety of cereal it sells. Out of 49 types, only about 20 types and brands remain.

Cosmetics and body care producer Edgewell Personal Care Co also limits its production. The brand known for its Banana Boat sunscreens and Schick razors reduces the variety of wet wipes.

As for Coca-cola, out of at least 400 types of beverages, it now only produces 200 types in its catalog. Tab, Zico, Diet Coke Feisty Cherry, and Odawalla have disappeared from its list of products.

Dollar General, known for its variety of mayonnaise options as a salad dressing, has now decided to discontinue some of them. “Consumers will not know the difference”, said CEO of Dollar General, Todd J. Vasos.

This condition cannot be separated from the digital economic revolution in recent years and accelerated during the Covid-19 pandemic. Consumers are faced with increasingly more choices of products.

Also read: E-commerce Consumer Behavior Predicted to Not Change

At the same time, online shopping offers many players the opportunity to get involved in the gaming arena. Moreover, the virtual marketplace is not limited by physical space. As a result, businesspeople are starting to think of ways to cut down on rent costs for space or even buildings.

The hard blow that occurred during the pandemic has made business owners think of ways to quickly cut losses amidst the difficulties in the supply chain. However, the situation does not stop after the pandemic is over.

Many business players believe that less is more in terms of options. They support the idea that buyers don’t need too many choices.

For entrepreneurs, this situation is also more beneficial because they do not need to give many discounts to chase sales. Or at least to cover production costs.

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Many people think that the more products offered, the easier it is for consumers to choose. However, another finding suggests that fewer choices and less variety actually drive buyers to purchase more.

This was found in the research of psychologists Sheena Lyengar and Mark Lepper, which showed that limited options are better for buyers in the early 21st century. Lyengar and Lepper found that consumers are 10 times more likely to buy a jam that is displayed in limited quantities. In comparison, there were only 24 and six types of jam on display.

On display with many options, customers do indeed stop longer. However, it does not necessarily mean they buy more. Research from Circana confirms the shift in consumer patterns.

(Note: No forbidden words were present in this article.)

Overall, new products only contributed 2 percent of the total products displayed in stores throughout 2023. This applies to various product categories. In 2019, the contribution of new products to sales reached 5 percent. Consumers choose old products.

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Eric O’toole, the President of Edgewell in North America, stated that the pandemic has provided a valuable push for businesses to evaluate the “diversity” of their products. Business owners are beginning to steer clear of excessive trends.

In the view of the business community, the supply chain and retailer costs required to support sales figures often do not yield the desired profits. “A tighter and curated portfolio supports healthy profit management,” he said.

Paco Underhill, founder of Envirosell and a psychologist, stated that retailers realize they must also value consumers’ time. Meanwhile, David Berliner, a company restructuring expert at BDO consulting, disagrees.

According to Berliner, showing fewer products will frighten and distance consumers. “You want to make this cut so that they don’t even realize it, and you want the store to still look full. If you do it too often, you might scare people,” he said.

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Berliners believe that reducing product variants can harm small brands that depend on retailers to sell their products. This situation may lead consumers, like Bob Friedland, to switch to their competitor’s products.

Friedland stated that he really enjoys the Open Pit brand barbecue sauce. However, for the past few years, local vendors haven’t been selling it in their stores. Finally, Friedland decided to buy it from a local market.

This means that the local stores not only lose to Friedland in the Open Pit sales, but they also lose out on other potential purchases that he usually makes when he buys his favorite barbecue sauce. “I really don’t like the idea of retailers telling me what I should and shouldn’t be interested in. I like variety,” said Friedland.

Criticism of business policies also came from US President Joe Biden. In a statement on Sunday (11/2/2024), he called on snack producers to reduce the weight of their products in packaging. However, the selling price remains the same.

Also read: Consuming sugary packaged drinks increases the risk of obesity

For Biden, the practice is equivalent to deception. He said that businesspeople reduce the weight of their products little by little while hoping that consumers don’t realize it. “Come on. The American people are tired of being played. I am calling on companies to stop this action. Let’s make sure that the business world does the right thing from now on,” he said.

Biden did not refer to specific product names. However, in the upload, several brands were shown, such as Gatorade, Doritos, Breyers, and Tostitos. Some of these names are produced by Pepsi Co. Biden used the term shrinkflation to describe this phenomenon.

Senator Bob Casey also highlighted the issue. Last December showed that the size or weight of several products became smaller even though they were sold at the same price. His findings included toilet tissue to snacks or light snacks.

The report states that household products made from paper are now 34.9 percent more expensive compared to 2019 prices. Despite the increase in prices, their sizes have become smaller. The same goes for snacks such as Oreo and Doritos. Despite a 26.4 percent price increase, the amount provided in the packages has decreased by 9.8 percent. (AP/REUTERS)