Too much choice? Why reducing the number of SKUs in your catalogues is better for customers

11/06/19

Freedom of choice is a core principle in our society, upheld by laws and civil rights, but it's not something that we always think about, or even appreciate at times. The freedom we have as people to define ourselves in the ways we want to, vote for who best represents us and live our lives how we see fit are but a few of the choices we can make on a daily basis. So, as distributors, offering as wide a range of goods and services is best for our customers, right?
Not exactly. It's a common misconception that consumers have an unending capacity for choices and that the more you provide, the better. But offering too much choice can have the opposite intended effect – choice paralysis.
If you're not convinced, how many times have you searched for something new to watch? Scrolling through the seemingly endless lists of TV shows and movies on your favourite streaming service, roaming the endless planes of channels on your cable or satellite box, and reading through pages and pages of review aggregator sites only to find yourself overwhelmed at the choice 30 minutes later?
Let's dissect.

The burden of choice

In 2000, Sheena S. Iyengar, of Columbia University, and Mark R. Leeper, of Stanford University, published a famous study in the Journal of Personality and Social Psychology, investigating the negative impact of choice.
In an upscale supermarket in Menlo Park, California, undercover researchers, dressed as store employees, offered shoppers the opportunity to sample either six or 24 exotic jams over separate five-hour periods. Although the extensive selection initially gained more attention (60% of shoppers passing by visited the stand, against the 40% who visited the reduced selection), 30% of customers purchased from the limited selection and only 3% purchased from the larger selection.
Barry Schultz, author of The Paradox of Choice, says there is a sweet spot to be found by offering neither too little, nor too much – several choices will initially cause an increase in satisfaction and subjective wellbeing, but passing this threshold causes the reverse effect, increasing paralysis and the stress of purchasing.
When facing many choices, the human psyche is likely to concentrate on the trade-off between options, focusing on lost opportunities over what has been chosen.
Schultz signs off his 2005 TED Talk with a cartoon fishbowl, one fish is advising the other that it can be whatever it wants to be, without limits. A seemingly nonsensical statement for a confined fish, but imagine the bowl was broken and every possibility was a reality, what would happen now?
This is choice paralysis, your business and your catalogue is the bowl. Your customers will be happy, even excited for the options you provide, but flooding the bowl and shattering the glass will paralyse your customers, decrease their satisfaction, cause confusion and potentially lead to disaster.
There's no clear rule for the number of options you should provide, with every business and market having different sweet spots to be found. What is clear, however, is that no business should strive to break their bowl and force their fish to find new ones to reside in.

Streamlining your sales catalogue

As a distributor of first aid products, it's vital you don't break your fishbowl by offering too much choice to your customers.
Aligning your offerings with your customers' needs and reducing the number of SKUs in your catalogues will help you find the sweet spot, leading to more intelligent purchasing decisions by your customers.
We understand that first aid is just a small portion of stock for many of our distributors, but at Aero Healthcare we are passionate about first aid and want to share that passion with you. Unfortunately, many of our distributors' clients purchase first aid products out of requirement, many lacking the time or resources to truly identify their needs.
Understanding your clients' first aid needs will allow you to streamline your first aid sales, minimising paralysis and enabling you to provide turnkey first aid solutions to your customers.
For more understanding on how our products work and what they're used for, download our free "Ultimate Guide to First Aid".


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