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Sunday September 06, 2020 |Notes

Product choice is in decline

Since the beginning of the pandemic, consumers have drastically changed shopping habits. Besides the surge in digital commerce, the number of unique products available to consumers at supermarkets has declined. Rather than giving consumers a seemingly endless choice of products, retailers and brands have focused on keeping top selling units in stock at the expense of less popular products.

The Washington Post reported on the shopping changes, focusing on the shift to fewer brands, fewer products, and reduced innovation. Increased online shopping reduces the number of choices. While shelf space may not be an issue online, digital placement is even more valuable and scarce, virtually eliminating the visibility of competitors.

This “narrower range” is not just a brick-and-mortar constriction. As the pandemic accelerates the shift to online shopping, the number of packaged food products available to purchase on the Internet fell 21 percent globally from January to May, according to Euromonitor International, a London-based market research company. It found that nine out of the 10 biggest countries by retail sales saw a drop in the number of unique SKUs available online.

With fewer choices, there are concerns that new & innovative products in particular will suffer the most.

“If you go stand in the salty-snack aisle of Kroger, there is probably a sampling station. You pick up a bag, read the nutritional panel,” he says. “Whereas on Amazon, you’re typing in ‘Heinz ketchup.’ You’re not going to discover Sir Kensington. People that buy groceries online tend to buy the brands that they know, the brands that have highest unprompted awareness. Seventy-five percent of repeat online shoppers start shopping in their previous basket, so if you’re a new brand it’s hard.”

In other words, new products and start-up food businesses may be in trouble. And with many trial-balloon opportunities nixed during the pandemic — trade shows like the Fancy Food Show or the Natural Products Expo West have been canceled, along with sports and music events — there are fewer forums for debuting a product and persuading retailers to buy in.

The change is apparent in grocery shopping and it's not the only place where consumer choices are being limited. Large retailers may have millions of SKUs but that doesn't easily translate to consumer choice considering the difficultly in online discovery.

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