Why Lack Of Focus Is Costing Retailers Customers

Danielle Beurteaux

In the UK, Tesco is responding to a deflated market share by chopping product selection. From a high of 90,000 SKUs, the company is aiming for a 30% reduction to around 60,000 SKUs. As one analyst said: “If you go into Tesco you will be faced with three of four bays of air fresheners… It’s painful for the shopper to navigate.”

Tesco’s competition? Chains Aldi and Lidl, both of which stock around 20,000 SKUs. Apart from the economic leverage these stores get from buying a more focused stock, they also offer consumers a quicker, easier buying experience.

More choice can tempt consumers to take longer to choose, give them less confidence in their choices – if they don’t put off making a choice completely. And with so many choices, there aren’t many definitive choices left. Isn’t there, we might ask ourselves, something better out there?

Is it time for retailers to offer less?

The truth is that the Amazon be-everything-to-everyone model doesn’t work for all stores, or for all consumers.

Hence the rise of single-category retailers and subscription services. These offerings have exploded in recent years. Need monthly shaving supplies? There’s Dollar Shave Club, but one of many choices. Or healthy snacks delivered? NatureBox. There’s also Birchbox for makeup, Barkbox for pets, and pretty much one for any segment. There are even websites dedicated to subscription box reviews. The subscriber’s only decision ends once they sign up for the service, except, usually, choosing what to keep and what to return. Men’s clothing services send a monthly box of clothes and subscribers have 10 days to send back what they don’t want. The digital economy offers much more shopping choice via e-commerce, but, at the same time, ways to narrow that choice and make it manageable.

Like Tesco, other brick-and-mortars are following suit. Even Target, a multi-segment store that has one of practically everything, is slimming down. In an effort to reverse its falling market share, some locations are what the company calls “flex format” stores. These are smaller stores with fewer items that have been chosen to serve the needs of local markets – one store stocks bicycling gear because of the large number of cyclists in the area, another things for children because of the amount of families.

Target is on track. Researchers have found that more choice leads to more confusion (um, yeah, we’ve all been there). As the authors of this Deloitte report write, consumers respond well to retailer “curation,” which can help create a relaxing shopping experience and engender customer trust and loyalty.

But the question of small and focused vs. large and overwhelming is less of a choice for many consumers because many areas don’t offer much choice for shoppers. The shoppers in wealthier and often urban areas are the ones who tend to buy at small, local businesses.

Online this is, obviously, not a problem, but some consumers are turning their backs on e-commerce because they find it too confusing to find what they want and are overwhelmed by choice, according to a recent survey by hosting company Rackspace. What are these shoppers doing instead? Heading out to shop at brick-and-mortars.

Representing the voice of the customer doesn’t go far enough anymore. Learn why we need to represent the voice of the market instead: For the Modern Marketer, Hearing (Market) Voices Is a Good Thing.

Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.