In a typical grocery store our research has found that in the top 20 categories, there are the following level of choices on average:
- 200 product choices
- 5 segment choices
- 7 brand choices
- 5 size choices
In other words, there is a sea of choice in these stores. In your average grocery store there are 45,000 products. Almost three-quarters of all supermarket products languish on store shelves, selling less than one unit (a single package, can, or bottle) per week, according to Paul Weitzel, managing partner with industry adviser Willard Bishop Consulting. Just 20 percent of products account for 80 percent of total sales. In fact, choice over the last 25 years in most stores has more than doubled yet at the same time the average household has spent the same amount per week. So is more choice necessarily a good thing? Sometimes no.
As consumers are presented with increased choice, the effort required to make a decision outweighs the benefit to the consumer of having more choice. Some choice is good but that doesn’t necessarily mean that more choice is better. Too much choice can hinder decision-making, causing shoppers to defer a purchase out of uncertainty or default to their typical brand/product.
When we test increased choice with shoppers in planogram research, we often find they take longer to shop and, apart from their typical shopping items, are less inclined to buy anything incremental. The reason: the time and difficulty to shop something new. Shoppers simply can’t decide what to buy if there are multiple things to consider such as price, nutritional value, convenience and name brand. So they simplify. For example, they’ll decide to always buy Brand “X”. That’s great if you happen to be Brand “X”, but not so great if you’re not.
We are finding that a winning trend in our research on planograms is simplifying choice either through SKU reduction, giving the high velocity SKU’s more facings or implementing merchandising solutions that help simplify shopping. These approaches usually result in improvements in shopability and sales. The key reason for this is the simplification for shoppers on “how” to choose versus “what” to choose. Presenting and simplifying the myriad of “choices” as outlined above so it aligns to how people shop a section delivers the strongest results.
So next time you are considering modifying your modular, focus more on “how” choices are presented on shelf to deliver the best results.
