Retailers and companies’ branded goods often require an overhaul to keep up with new shopping trends and customers’ choices.
In a major reversal of previous direction, retailers now are reducing the amount of choices on their shelves. Following many years of luring customers with an ever expanding collection of brands, sizes and items with varied ingredients, retailers are beginning to realize this assortment is counter-productive.
Retailers now are aware that simplifying and culling the offerings has encouraged stores to feature customers’ top choices while eliminating the marginal, less profitable products.
All this is part of an effort to reduce costs and help to eliminate customer confusion.
Surprisingly, cutting back on the proliferation of products increases sales by a better focus on more popular choices.
It must be acknowledged that sometimes it is not easy to determine which products should be dumped, so often mistakes are made.
The average shopper wants to spend only a few seconds picking out an item to buy; if there are too many on the shelves. shoppers may just skip buying anything at that spot.
It has become clear that consumers have trouble deciding what to buy when confronted with many choices.
Retailers do not want shoppers spending too much time in any one aisle, causing traffic congestion and irritated customers.
Too, retailers want to make more room for private-label products, which have higher profit margins than name-brand items.
Then there are additional problems connected with launching new products.
The automobile companies learned that. Ford’s Edsel was a major mistake, as was General Motors’ Saturn, and that hampered efforts to concentrate on their most popular brands.
Manulife Financial Corp. increased its percentage of hedged or reinvested equities as well as distributing its products through other banks and brokerages.
Also, it is tripling its offices in China. Canadian Tire is experimenting with food sales.
On the other hand, Sobeys successfully introduced new product lines to expand its operations by appealing to the growing ethnic population, particularly around Toronto. Proper research has become important before introducing new products or discarding others.
A crisis can give retailers a long-term boost.
When shelves are cleared, customers respond.
Similarly, new product lines may attract attention and serve as a springboard to new sources of revenue. Hence, companies can emerge from a business recession stronger than ever.