A crisis of choice?

(Edmonton) A popular Rolling Stones tune once offered that one can’t always get what one wants.

However, a University of Alberta researcher says that, in a bid by retailers to give the people exactly what they want, the confusing selection of products that consumers are left with makes it hard for some to figure out what they want—or need.

The fact that more is not necessarily better is something that retailers need to consider lest they lose shoppers to a rival that is happy to offer a smaller selection of goods, says Alberta School of Business professor Kyle Murray.

Murray’s findings stem from a study that he co-wrote with Janet Buczek from the Research Intelligence Group that was drawn from a telephone survey of more than 3,000 shoppers in Canada and the United States. The study found that, while some segments of the population may be happy with the confounding cavalcade of choice, smart retailers target the buyer’s habits and not their wish list of products.

Grey and green power

Making the shopping experience easier for certain target groups, such as seniors, makes for a better business model, says Murray.

“The interesting thing from the retail perspective is that seniors are a growing demographic of increasing importance and affluence,” he said, explaining that some retailers are building smaller neighbourhood-style stores with less selection, which attracts seniors and other shoppers seeking the “less is more” choice when shopping.

“It might sound counter-intuitive to say that people will be happier if you give them fewer choices, but that strategy works for some segments of consumers,” he said.

Canada and the United States: divided by more than a border

The survey also indicated that when it comes to deciding what product to buy, retailers should not bet it all on marketing and advertising, especially in the Canadian market.

Murray notes that when American retailers set up shop north of the border, they typically follow the same model used for the home market. What the survey noted, says Murray, is that when it comes to choosing a product, Canadians are less swayed by the advertising or marketing for the product than their American counterparts and also less confident in the purchase decisions they make because of advertising.

“Canadians place more emphasis on things like word-of-mouth and actual product use,” says Murray.

Another distinction is the Canadian reliance on customer service in a store. Canadians like more assistance from a salesperson than Americans do.

Attention to ethnic markets

The growing size and importance of the Hispanic population in the United States means that smart retailers have to key in on these differences if they want to be successful with that segment of the population. Canadian retailers, Murray notes, have already discovered the importance of ethnic markets, a fact supported by Loblaw’s acquisition in 2009 of Edmonton’s T&T Supermarkets, an Asian supermarket chain.

“[Canadians] have a multicultural approach rather than a melting pot approach. We have these multicultural pockets that are still very much integrated in Canadian society so it works both ways,” said Murray. “You start to see the regular, neighbourhood grocery store stock more and more Asian food and the Asian grocery stores are trying to expand to a one-stop shop.”

The little guy gets the last laugh?

Murray notes that the role and focus of small retailers is important, especially for the medium and large stores looking to consolidate their choices into smaller locales. He says the pushback over too much choice in the marketplace is what makes these smaller stores more attractive to people.

The small retailer, he says, will have several thousand regulars who are happy with the product selection of that store. And, as more shoppers become disenchanted by stores that have a selection that makes the shopping process harder, it makes sense for larger retailers to try to follow a model of a small, targeted product selection.

“The small retailer with less square footage and fewer products has to make those hard decisions about what he’s going to carry and which customers he is going to serve, whereas a big box store of 100,000 square feet is almost taking the opposite approach,” said Murray. “It’s actually one of these cases where the small retailer has a big advantage.”

The article was published this past summer as a white paper by the Research Intelligence Group.