It may seem counterintuitive, but retailers are discovering that the best way to get people to buy more is to offer less. That’s the case in the grocery store aisle, and it’s true with clothing, toys and accessories, too: Endless scrolling — or racks of choices — leads to decision fatigue. When the options are limitless, we often choose to buy nothing at all. That’s a disaster for retailers, who must turn around and cut prices to cull inventory and make way for the next shipment of goods. Even worse, the environmental impact of cheap goods is enormous.
On the other hand, curating options is beneficial for both consumers and the retailers who rely on happy customers. “Offering fewer unique products — and cutting those that don’t sell quickly and have to be discounted — is also a way to trim costs and fatten margins,” notes the Wall Street Journal. For example, HanesBrands began limiting the variety of offerings during the pandemic, when they, like many companies, were struggling to maintain adequate stock during recurring supply chain breakdowns or delays. But the reduction continued: The number of unique products as of the first quarter of 2024 is down about 50% from 2019, the Journal reports. That has only benefited their profits — gross margins were 40% this quarter, up from 32.4% a year ago. Companies like Deckers Outdoor are also reaping the financial benefits of their reduced offerings: “More products are selling without discounts… [and some are] even selling at higher prices.”
Similarly, Under Armour, Levis Strauss and Hasbro all have already or plan to cut their SKU counts by as much as 50% to give consumers the “right aisle” as opposed to the endless one, the Journal continues. Meanwhile, Dollar General “used to stock six different kinds of mayonnaise on its shelves and is now looking to drop a couple of them,” reports the Associated Press. And “Kohl’s has been cutting back on the colors and variations of sweaters, jeans and other items” in a more “edited approach.” The reason? Consumers won’t notice the lack of choice; in fact, they’ll be relieved by the absence of clutter and overwhelm. Notes Vogue Business, a “consequence of too many choices is that people end up less satisfied with their decisions. A store stuffed with 1,100 white cotton blouses can only raise doubts that a better blouse was missed somewhere in the haystack… [creating] a lingering sense of regret.”
To mirror the reduction of offerings, some stores are shrinking too; Macy’s and Bloomingdales, two department stores known for their massive sizes, are closing their huge stores and opening shops with smaller footprints: 30,000 to 50,000 square feet, down from as much as 200,000, reports Vogue Business. But the average store in America is just 3,200 feet. It’s a size that is easier to manage for consumers and retailers alike.
Shifting priorities requires updated information
For supply chain professionals who began their careers during the “more is more” era, buying less and trusting customers to stay loyal to the brand might take some getting used to. But that’s where the ASCM Knowledge Center comes in: It’s your one-stop shop for on-demand learning content, from webinars, courses, microlearnings, discussion groups and more that will bring you up-to-date on important topics in supply chain today. From retail to logistics, risk management to robotics, and chaos theory to SCOR, you’ll find everything you need to improve your knowledge of supply chain — and level up your career. Join ASCM today and you’ll get access to this valuable resource, and so much more.
