Narrow choice for consumers: keynoter to Shop.org delegates

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NEW YORK - If retailers offer too much choice, consumers can be drowned in a sea of more information than necessary.

Thus was the premise of the keynote presentation Oct. 11 at Shop.org's annual summit. Barry Schwartz, author of "The Paradox of Choice," and Phil Terry, CEO at Creative Good, addressed this issue of how marketers can stay relevant through selectively simplifying content.

"The key is to focus on the sweet spot," Mr. Terry told e-commerce executives in the audience . "Google focused on the sweet spot. People needed search to be simple and not have a lot of busyness on the Web sit, so they focused on simplicity."

Mr. Terry used Google as an example of how paring down versus the choice offered by other search sites like Yahoo and Lycos made Google the search giant that it is today.

The e-commerce sites of AnnTaylor, NewEgg and Gateway were also cited as examples of retailers who increased sales by focusing on key products.

Ann Taylor increased sales by 22 percent while decreasing inventory by 17 percent from a simple promotion around "The right skinny pants." The company offered a simple tailored pant that every woman in the AnnTaylor demographic would want.

The key to this was having a good understanding of one's customer, Mr. Terry said. If the product is not something that attracts the clientele, the results can be devastating.

"It can be risky, but the trick is to understand your customer," Mr. Schwartz said. "Marketers sacrifice getting the important things right by trying to have everything right. The right thing to do is to narrow it down."

Room for long tail

One key question from the audience was how this idea of the paradox of choice conflicts with the popular idea of the long tail by journalist Chris Anderson.

Mr. Anderson's thesis, applied in this case, is just the opposite of Mr. Schwartz's: That because of technology, stores can maintain huge inventories that they haven't been able to do in the past.

Mr. Schwartz said he finds Mr. Anderson's idea brilliant, adding that the two can work together. The vast options means smaller cultural objects can have a life they did not have before, but people will still gravitate to the most popular options.

"Case in point, there are hundreds of news blogs online but most people get their news from known sites who have a presence in the offline world like USA Today and The Wall Street Journal," Mr. Schwartz said. "I think that both theories can work, and technology created this problem and technology will solve this problem as well."

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