A Non-Traditional Retail Approach: Less is More

We have all done it – seeing how much more can we fit on the shelf, or where else can we add a shipper – but is it the right approach?

By taking a hard look at what we offer in each category and understanding what is essential to our success, we can focus on core items that our customers expect to see. We also reduce out-of-stocks and over-stocks by eliminating products that are just taking up shelf space. We can then supplement with new items to keep our mix fresh and exciting.

Keep in mind that overstocks take up space too; it makes much more sense to cut our losses and gSnack-Foodset rid of what doesn’t sell so we can put more productive items on the shelf.

There is danger in offering too many choices to customers. Having a large amount of choices may overwhelm customers and send them to a competitor with simplified options.

According to a study by virtual research firm InContext Solutions, the quicker shoppers are able to find their first product, the more likely they are to linger in the category and purchase more.

"Today's time-strapped, distracted shoppers don't want to get lost in the store. They want to find what they're looking for and move on," said Chiara Piccinotti, director of insights at InContext Solutions. "If retailers help shoppers save a couple of minutes finding the one thing they want, they'll end up purchasing an extra product on average. Extrapolate that over millions of shoppers and the sales impact really adds up."

For instance, look at the history of gum in the past several years. Gum had been declining year-over-year for more than three years, until researched showed that reducing the number of SKUs offered to the consumer could actually make the category grow. This is a prime example of too many choices overwhelming the consumer, causing them to give up and purchase nothing.

Taking a category management approach and honing our product mix will ensure that we are offering products that will keep our customers coming back again and again.

Source: Source: Salient.com Target’s New Approach; Less is More March 2016

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