How Much Brand Choice Do I Really Need?
For many consumers today, the variety offered in supermarkets is daunting, and it shows no signs of slowing. We have tripled the amount of skus carried in an average supermarket since 1980, from 15,000 to 45,000, and last year alone FMCG’s launched over 20,000 new products. To paraphrase from Barry Schwartz’s legendary book the Paradox of Choice, having too much variety can paralyze consumers from making decisions and actually buying, and having too little variety can offend.
So where is the right balance, and importantly, how do you begin to think about it?
There are many lenses through which to attack the “right variety” question (category management, corporate identity/image, competitive differentiation), all of which would have merit, but one of the most essential ways to analyze your variety is from a brand meaning perspective. In other words, from a consumer point of view, which brands really have the most viable equity in the category – this is not about brand share as an indicator of power, it is a more difficult question that gets at true meaning and the interpretative weight of the brand. Let me tell you what I mean through a few examples:
Low Equity = High Vulnerability – As is well-documented, when you troll into some Walmart non-food categories as a shopper, it is actually tough to find any brand offering other than their own brands. Candles, lamps, tabletop picture frames, kitchen essentials are all dominated by Walmart’s own brands, and it is because they see low existing brand equities in these categories that can all be displaced. In the same way you see Benissimo oils and Stop & Shop Simply Enjoy oils sitting side-by-side, I believe you probably could exist just fine with the own brand offering only.
Frivolous Variety – Even where there is a degree of meaning to the brands, there can still be frivolous variety, like there is in organic ketchup. Annie’s, Cucina Antica and Brad’s all have some growing equity in the organic consumers’ eyes, but when you see the sameness that literally is demonstrated through the product (and packaging), and when you see it so blatantly at shelf, it doesn’t pass the “right variety” sniff test. I am sure the sales metrics don’t bear out an argument for carrying all three, but this again is more about brand meaning (and even brand differentiation). Jump to a non-foods example like Office Shredders and run it through the sniff test – Best Buy has 26 different brands of shredders for sale, which is 11 more brands than Amazon. Remember that robust brand variety doesn’t always help corporate image or category image, it can impede purchases.
A Look At Commodities – The other useful example to help root out right variety is in categories or category segments that are fairly commoditized. Take honey as an example, particularly the 12 oz. squeezable honey bear that many retailers carry. Having one brand in this product sku is likely enough, but some retailers carry 3+ brands of the same exact sku. It is going to be tough to argue that Bee-Maid, Gunter’s and Busy Bee all deserve a place at the shelf. In the dried cup-of-soup segment, I would put the same critique forward that Nissin and Maruchan both don’t deserve merit from a brand equity point of view.
The concept of right variety has often been analyzed in the industry, though we have found recently that there are many retailers who want unadulterated, fresh eyes on their brand variety from an equity (and less so a category management) perspective. If you look from a consumer POV and with real scrutiny, there will definitely be 20+ examples that would reside in your store today. Go after them and your shopper will actually thank you for it.
As seen in Global Retail Brands Magazine, October 2014 edition