Tesco are seeking to slash ranging. So where is bigger assortment “good” and where is it “bad”? And what can Shopper Research usefully can tell us?

The new paradigm is that broad ranges in supermarkets is now a problem. The discounters, we are told, have proven the beauty of “less is more”. And the almost mythical story that shopper research has shown that a customer will buy more if offered less range is trotted out – albeit often badly misquoting the actual study (which can’t be applied to any category)! Now Tesco tell us part of their recovery will be based on slashing ranges.

Putting aside the familiar commercial benefits of reduced ranges (less stock, better terms from those products that survive the cull, improved velocity etc), let’s consider the new dialogue about that shopper side of this. For sure, one of the attractions of a modern “full service” supermarket is you can get everything you need. Before Supermarkets existed, the bane of a shopper’s life was having to trek from place to place to buy their needs. Shopper research in the 1960s would have shown this as one of the biggest points of pain. Indeed, our recent shopper research into Discounters shows that shoppers’ highest rated “negative” about their shopping at these stores is the inability to do a “full shop” there. See https://www.shopperintelligence.com/shoppers-and-discounters-busting-myths/

So here is the conundrum: how do you cut range but still compete against the discounters using range breadth as a weapon? Is it as simple as “deleting the tail”?

The key answer of course is to cut range where it does not matter to the customer, and keep it where it does. But how do you know with any certainty where it matters? In our annual benchmarking program we ask exactly that question of 140,000 shopping trips each year across all the major supermarkets. Where is range most important and valued?  Here are the top 10 categories in the mainstream supermarkets where range of product is most critical:

Category Shopper Range importance score Rank
Herbs & Spices 3.84 1
Baby Food 3.81 2
Frozen Vegetarian Food 3.76 3
Deli Counter Cheese 3.75 4
Sauces/Condiments 3.74 5
Baking & Ingredients 3.73 6
Children’s Medicine 3.72 7
Fresh Vegetables 3.72 8
Chilled Vegetarian Food 3.71 9
Bitters/Ales/stout 3.71 10
Fresh Fruit 3.69 11
Fish Counter Fish 3.69 12
Sandwiches 3.68 13

* Source Shopper Intelligence UK 2014 n=62,000

 

So what does this tell us? We see several types of categories here:  Categories where the different types are inherently different and don’t/can’t substitute. Herbs and Spices, baking ingredients etc. Second, categories where you don’t want to have the same thing time after time – Cooking Sauces, Vegetarian Food, Sandwiches. Third categories where you need wide choice as part of the appeal and the entertainment of the category eg cheese, fish) and finally, where your own specific variety is mission critical to you (like in Medicines or Ales).

Conversely, categories where choice is of the lowest importance can involve relatively poorly differentiated categories (like Toilet paper or Dishwash). But one needs to be careful. Some categories can rate low on the importance of ranging because shoppers have a “settled choice”. So to each individual range is unimportant (as long as their options is available). But perhaps this choice is different for each shopper? To understand this we also need to look at our brand loyalty metrics. Many of these categories are also ones where there are (for most people) only a very few varieties they are even aware of/care about…..

Lowest rated for Range Importance:

Category Shopper Range Importance Rating Rank
Colas 3.34 128
Tissues 3.33 129
Washing up/Dishwash 3.32 130
Longlife Desserts/Custards 3.30 131
Toilet Paper 3.29 132
Hot Cereal 3.29 133
Tobacco 3.27 134
Paper Towels 3.21 135
Beans or Spaghetti 3.20 136
Milk 3.20 137
Grapes 3.14 138
Sugar 3.00 139
Bananas 2.86 140

 

So in the decision how to “weaponise range”, shopper research is key, or something that should be your source of competitive advantage becomes yet