Bernie Sanders, deodorant, sneakers and Coca-Cola: Big companies cut bloated product lines

When Vermont Sen. Bernie Sanders first ran for president, the democratic socialist made headlines when he criticized the glut of choices in, of all places, the deodorant aisle.

“You don’t necessarily have to choose between 23 underarm spray deodorants or 18 different pairs of sneakers when kids in this country are going hungry,” Sanders told CNBC in 2015. “I don’t think the media appreciates the kind of stress that that ordinary Americans are working on. People are scared to death about what will happen tomorrow.”

Sanders’ comments drew much derision among conservative media, but nine years later, it appears that corporate America is coming around to the Vermonter’s surly view that there can be too much choice.

For Coca-Cola, 400 different types of drinks are too many; the beverage company recently decided to discontinue half of them. It eliminated brands like Tab, Zico coconut water, Diet Coke Feisty Cherry and Odwalla juice, still leaving about 200 others to choose from.

It’s a move other companies are making too, reducing the variety of offerings from mayonnaise to cereals to cars and instead focusing on what they think will sell best.

“The consumer won’t notice the difference”

Stew Leonard’s, a supermarket chain that operates stores in Connecticut, New York and New Jersey, now offers 24 flavors or types of cereal, down from 49 in 2019. Edgewell Personal Care Co., the maker of Schick razors and lotion tanning company Banana Boat, has cut a few varieties of its Wet Ones antibacterial wipes, among others. And Dollar General, based in Goodlettsville, Tennessee, had six different types of mayonnaise stocked on its shelves and is now looking to release a couple of them.

“The consumer won’t know the difference,” Todd J. Vasos, CEO of Dollar General, told analysts in December. “To be honest, when he goes on the shelf it will make her life a little easier.”

Just a year ago, the Kohl’s store in Clifton, New Jersey, had tables full of sweaters and shirts in a rainbow of colors, as well as shelves filled with a wide assortment of styles. It now boasts a more modified approach: Tables have thin stacks of knit shirts that focus on fewer colors, and many hangers have been pared down to just three or four styles.

Under new CEO Tom Kingsbury, Kohl’s has pared back the colors and variations of sweaters, jeans and other items, while sending its shoppers to the New York market more frequently to bring in fresh, trendy merchandise.

“We would go out and buy a lot of goods and they would come in 12, 14 months later, and it wasn’t working very well,” Kingsbury told analysts on a call in November. “We will use the market, so we can react quickly to the business, tapping into the trends.”

‘You don’t feel overwhelmed’

Some customers like the changes so far.

“It’s pretty organized,” said Kimberly Ribeiro, 30, who was at the Kohl’s store on a recent Friday. “If it’s not that messy, you don’t feel overwhelmed.”

Even in the world of cars, buyers are finding fewer and fewer choices. Both General Motors and Ford have publicized how they are limiting the number of option combinations customers can get on their vehicles to reduce manufacturing and purchasing complexity.

The movement toward fewer choices represents a reversal from a few years ago, when there was an explosion of choices, encouraged in part by online shopping that paid no attention to space limitations. But that didn’t always lead to sales, so companies started eliminating selections a year or two before the pandemic.

During the pandemic, pruning has only accelerated, with companies focusing on necessities while struggling with supply chain bottlenecks. But even after the pandemic, when goods began to flow freely again, many companies decided that less was more and justified the limited selection by saying that shoppers don’t want as much choice. It’s also more profitable for companies because they don’t carry as many leftovers that have to be discounted.

Lots of choice, fewer sales

Overall, new items accounted for about 2% of products in stores in 2023 in categories such as beauty, footwear, technology and toys, down from 5% of items in 2019, market research firm Circana says.

Eric O’Toole, president of Edgewell’s North America division, noted that the pandemic was “a really valuable stimulus” to reevaluate the assortment.

“We avoid following fads, as the supply chain and retailer costs needed to get to shelf typically don’t generate a return in the end,” O’Toole said. “A smaller, more curated portfolio supports healthy profit management. “

Many think they’re also doing shoppers a favor, with studies showing that fewer choices, not a lot of variety, actually encourages shoppers to buy more.

In 2000, psychologists Sheena Lyengar and Mark Lepper published a study showing that limited selection is better for the shopper. In their experiment, Lyengar and Lepper found that consumers were 10 times more likely to buy the jam on display when the number of available jams was reduced from 24 to six, even though they were more likely to stop at the display that offered the most selection . Subsequent studies have confirmed this phenomenon.

“Retailers are recognizing that they have to be respectful of consumers’ time,” said Paco Underhill, whose company, Envirosell, studies consumer behavior.

However, retailers can’t cut products willy-nilly, said David Berliner, who leads the corporate restructuring and turnaround practice at BDO.

“You want to make these cuts so they don’t even notice, and you want the store to still look full,” Berliner said. “If you do it too much, you might scare someone.”

Berliner also believes that reducing variety could hurt even smaller brands that relied on retailers to offer different products and would drive shoppers like Bob Friedland to other competitors.

The 48-year-old communications consultant from Little Falls, New Jersey, said that for years his favorite barbecue sauce was Open Pit. But Friedland noticed that in recent years his local grocery stores no longer had it available, and he has since turned to Amazon to purchase it. That means those local stores not only lost Open Pit sales to Friedland, but also all the other purchases he made while purchasing his favorite barbecue sauce.

“I really don’t like the idea of ​​a retailer telling me what I should and shouldn’t be interested in,” Friedland said. “I like variety. I like specific brands.


Associated Press business writers Dee-Ann Durbin and Tom Krisher in Detroit contributed to this report.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *