Opinion: Stores can beat online by avoiding tyranny of choice

Article

The gloomy Danish philosopher Kierkegaard found much of life to be painful, but it can be assumed he would have harboured a particular ennui for online shopping.

Too many options, especially when combined with the stress of information acquisition, create what he called the “tyranny of choice”. Hesitation leads to worry and even a good decision can be plagued by angst over the alternatives not taken. It’s the reason Kierkegaard broke off his engagement – and then regretted it when the young lady married another.

Type “men’s trousers” into Amazon and over 70,000 results are available. The limited filter buttons are of little use in finding the item that might suit your style or fit. This not a good customer experience. It’s one of the reasons online shopping has been so unsuccessful – seriously. After 25 years and hundreds of billions in investment, it has still captured less than 20 per cent of retail.

Online shopping is great at shipping the bestselling Avengers Blu-ray everyone wants, fast and fairly cheap. Or, it brilliantly solves your directed search for that obscure long-tail replacement freezer basket. But it’s not so good at browsing in the middle tail, where you need guided discovery and inspiration, where you are not sure what you want or don’t even know you want it at all.

These missions are where good stores with judicious curation and human guidance are still winning, and for as long as they do so, online penetration will continue to slow.

Too much
In one episode of The Simpsons, Homer visits a new superstore, Monstromart, whose chirpy strapline is ‘where shopping is a baffling ordeal’. Stores should not attempt to compete with the internet.

Expanding ranges, endless aisles and drop shipping confuse and exhaust the customer. Throw someone one tennis ball and they’ll catch it. Throw them a bunch and they’ll drop the lot. You cannot possibly approach the infinite shelf space and ever-expanding range of a marketplace. But you can create a better selection for your customers than its page-one results.

Amazon or Google will probably solve discovery and comparison eventually. The promise of AI may mean that recommendations become relevant. The algorithm may get that because you once searched for a scooter, you either ended up buying one or decided not to, rather than collecting a garage-full. Pinterest, Etsy, Stitch Fix and others are building solutions to the question “what might I like?” rather than “find me this”. But until online shopping solves its biggest remaining challenge, shops have a role.

In our analytics work, we almost invariably find that retailers can eliminate at least 10% to 20% of SKUs while increasing profitability and satisfaction. The key is to find the right SKUs to cut – those that add no meaningful choice, which are unimportant to high-value customers, which cannibalise higher-margin alternatives, which clog up inventory and space, and which degrade and clutter the customer’s experience.

This article first appeared on Retail Week, 8 August 2019

Find out more about Michael Jary, Partner