- Western consumers are conditioned to have a ton of choice in their
shopping experience. - This makes
supply chain issues more challenging as retailers have to stock more items.
The Western consumer is accustomed to having an abundance of choice when it comes to shopping, enjoying options on everything ranging from toilet paper to tomato ketchup.
But that insistence on variety could now be adding to the current strain on supply chains, contributing to gaps on shelves at the supermarkets who have long touted diverse product choice as a lure to shoppers.
Walking into your local Walmart store, you're likely expecting to have the option to shop different varieties on virtually everything. It's a strategy that retailers use to get people through their doors, but it also puts more pressure on the store to keep all these items in stock. And when supply chain breakdowns hit one brand of goods, the search for alternatives can lead to wider problems with managing inventory of other brands.
With the supply chain now under strain, those retailers that offer fewer product types are better positioned to withstand the challenge, experts say, and maintain their commitment to the customers who choose to shop there.
Take the Aldis, Lidls, Dollar Generals, Dollar Trees, and to some extent, the Costcos of the world. These stores have a limited number of specific items in their stores and stock a large amount of own-brand goods. This approach means they can reduce costs and streamline supply chains, Dave Marcotte, longtime
Buying fewer products in bulk gives these stores greater bargaining power with suppliers and means they have a smaller assortment of items to worry about being in stock and, most likely, fewer suppliers to deal with. Lidl's UK and Ireland CEO flagged this advantage in a recent interview.
Though this doesn't make them immune to supply chain challenges – only recently, Aldi posted a message on its website apologizing for certain products being out-of-stock – it does help them avoid the 12-foot-holes on shelves that grocers hate but shoppers have come to expect in recent times. Moreover, by not promising to offer abundant choices, they have more flexibility to swap items in and out.
Some retailers are seeing that there is value in the less is more mantra. For example, in the latter part of 2020, stores such as Coach, Bed Bath & Beyond, and Kohl's all said they would cut back on sourcing or producing different varieties of certain products to simplify things, The Wall Street Journal reported at the time.
Aside from the supply chain-related benefits, research has also shown that limited choice could in fact spur more customer purchases.
That's something Sheena Iyengar and Mark Lepper, two professors who co-wrote a paper looking into the psychology of choice, found in their research.
"Although the provision of extensive choices may sometimes still be seen as initially desirable, it may also prove unexpectedly demotivating in the end," the two professors wrote.
Ultimately, too much choice can be paralyzing for the customer.