Customers have more choice than ever before. At the same time, it is often not easy to understand what differentiates one product from another. Add into this the increased complexity of “connected products” and it is clear to see that the customer has a bewildering array of products to choose from.
Here is a McKinsey article on the growth of smart connected home products
It has always been assumed that by providing more options, customers will be more likely to find the right product to purchase. Theoretically, this is true but within a retail environment, where filtering is difficult, it generally leads to lower conversion rates and lost sales.
Here is a great article that provides some compelling evidence to support this.
So, what should Brands do to help customers manage excessive choice? Brands need to manage the entire Purchase Decision Journey for the customer within a store and to guide them through all the decisions that need to be made until they reach the point of conversion. This requires the application of three main strategies that help the customer in the following ways:
• Provide clarity on what the products do
• Convey what is different about the products – performance, quality etc.
• Match the products to a precise customer need
Place products within the context of how they will be used
To help customers quickly understand whether a product will meet their needs, an immersive technique is to place the product within the context of how it will be used. This makes it easier for the customer to understand the ideal application of the product and to see this in relation to their specific requirements.
Example: The presentation of connected home products in retail is leading the way in applying this technique. As a customer, we are starting to see many department stores and electronics retailers presenting these products in a lounge, kitchen or outdoor scenario. By placing these products in context like this, helps the customer better ascertain f the product will deliver on their expectation.
Convey key points of differentiation
It is often difficult for customers to understand the key points of differentiation. What is different from one product to another. In the vast majority of cases brands and retailers only communicate the key features, thereby leaving it up to the customer to work out for themselves what is different and unique about a product. The key technique is to switch emphasis to highlighting points of difference and to make this as easy as possible to compare to other options.
Example: The presentation of wearables is starting to use this technique, even though the emphasis is still too much on a list of features. So, for a product to have its own GPS is a feature but what differentiates it? Well it means that the product will work without having your phone with you that can be very important for certain types of activities.
Match the products to a well-defined need
There are many product categories where there are a range of different options that all seem like they will deliver the same end result. However, some will have features that are not required and will be over-engineered for what the customer really needs the items to do. In these cases, Brands need to describe the precise need and then recommend a specific option and in this case, they may package up more than one product into a complete solution.
Example: Many products fall into this area like gardening equipment, electronics, kitchen equipment etc. Consider an elderly couple who wish to water their cottage garden comprising many plant pots. When you look at the vast array of watering products, it is next to impossible for them to work out what is best. However, package up a short 30m expandable hose, outdoor tap connector and a sprayer ideal for pots and the choice becomes easy.
What is clear is that excessive choice can inhibit retail shopper conversion. Marketers need to develop shopper marketing strategies that help guide customers through this myriad of choice. In effect, it is providing a decision tree that seamlessly helps the customer make the right decisions in order to reduce choice down to a number of key options where the best purchase decision can be made.
More reading here.
If you would like more information on how LeanPie can transform your shopper experience supply chain, please feel free to contact David at firstname.lastname@example.org