Retailers Have a New Philosophy: Less is More
In light of the current economic times, retailers have begun to reduce the number of products they offer. When the economy was booming, a consumer could easily peruse through a national retail store and find 88 varieties of Pantene shampoo or even 50 varieties of Oreo cookies.
According to a news article by The Wall Street Journal retailers plan to cut product variety by at least 15%. Some have already begun to do so. Walgreens used to carry 25 different superglues and now it carries 11. Walmart cut the number of tape measures it carried by 20, leaving only four. Kroger Company plans to reduce cereal varieties by 30%.
Why you might ask? Retailers believe the old saying that less is more. Consumers complain that shopping experiences have become too hectic with so many product offerings that they become easily confused. Retailers have found if they eliminate the excess, product sales will actually increase. There are other advantages for these retailers as well, including lower labor costs, fewer out-of-stock items, and better negotiating skills with manufacturers.
This is good news for the leading brands, but not so good for the smaller unknown brands. Retailers have been cutting back on these brands, leaving more shelf space to the big guys. The smaller guys, like Church & Dwight, who manufacture products like Arm & Hammer baking soda and Aim toothpaste, have begun to fight back. Sales representatives prepare compelling national sales trends to get their products back on the shelves. Other manufacturers are fighting back in a different way by reducing the number of products they produce. For example, Sara Lee will now only offer 14 varieties of Jimmy Dean breakfast sandwiches, compared to 25 the prior year.
It will be interesting to revisit this topic in 2010 to see who has won the battle.
Read the complete article “Retailers Cut Back on Variety, Once the Spice of Marketing.”
photo credit – ( www.neurosciencemarketing.com)
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