Retailers and suppliers say it didn’t pay to offer products for everyone, and customers didn’t care that much when they stopped
4 min
The furniture retailer Malouf sells beds and bedding in a fraction of the colours it did a few years ago. Newell Brands, the Sharpie maker, has retired 50 types of Yankee Candle. Coca-Cola offers half as many drinks.
Covid slashed consumer choices as companies pared their offerings to ease clogs in the supply chain. The logistical mess is behind them. But many of the choices aren’t coming back.
Retailers and suppliers across industries—from groceries to health, beauty and furniture—have said that it didn’t pay to offer products for everyone, and consumers didn’t care that much when they stopped.
“Today, people would rather lose a portion of consumer demand as opposed to spending extra on too much variety,” said Inna Kuznetsova, chief executive officer of ToolsGroup, a supply-chain planning and optimisation company.
Macy’s president and CEO-elect, Tony Spring, told analysts in November that “the customer today does not want an endless aisle.”
New items made up about 2% of products in stores in 2023 across categories such as beauty, footwear and toys, down from 5% of items in 2019, according to the market-research firm Circana. Shelf Engine, a technology company that automates ordering for grocery retailers, said large grocery stores have reduced fresh-food offerings such as fruit, dairy products and deli meats by 15% to 20%.
Large grocers cutting back on choice is a reversal from pre pandemic days, when they believed they had to carry everything to avoid losing customers to the store across the street, said Stefan Kalb, CEO of Shelf Engine.
Kalb said that grocers are now saving money because they have fewer items to manage and that the slimming of product options is reducing food waste.
Executives at consumer-product companies said the thinning of their product lines has been a relief for those struggling to improve profitability in the midst of higher interest rates and rising costs for raw materials and labor. They said many of the reductions have been in lines that consumers wouldn’t notice, such as items in special packaging and assortments for specific big-box retailers. The cutbacks are also to product lines that drown consumers in options.
“I don’t think any consumer would have noticed we went from 200 to 150” types of Yankee Candle, said Chris Peterson, chief executive of Newell Brands.
Some industry specialists said the new focus on bestselling items has reduced innovation and hurt smaller brands that rely on retailers’ desire to carry something for everyone.
“There has definitely been less innovation since the pandemic,” said Seth Goldman, a founder of the organic-beverage maker Honest Tea, which was bought by Coca-Cola in 2011 and discontinued in 2022.
Coca-Cola over the past few years reduced its brands to 200 from 400, cutting slow-growing as well as declining products, including small regional lines such as Northern Neck Ginger Ale and national brands such as its first diet cola, Tab.
“It was pruning the garden to let the better plants grow,” Coca-Cola Chief Executive James Quincey said in 2022.
Goldman said there was still demand for Honest Tea, even if it wasn’t big enough for Coca-Cola. In September 2022, four months after Coca-Cola’s announcement, he launched Just Ice Tea, a drink that he said is similar to Honest Tea and that is expected to have sales in 2023 of more than $16 million.
Companies began winnowing product lines in the years leading up to the pandemic as a corrective to previous decades when consumer choice ballooned. That was partly because of the internet, where online retailers weren’t constrained by the space limitations of physical stores, giving rise to the term “endless aisle.”
The cuts were turbocharged in 2020 and 2021, when product shortages and a surge in consumer spending led companies to give priority to the most in-demand items. They focused on products that ran fastest on production lines and, because of social distancing in factories, could be made with automated machinery.
Kimberly-Clark cut more than 70% of its toilet paper and facial-tissue products over a single weekend in 2020 as it rushed to satisfy a fourfold increase in demand, said Tamera Fenske, the company’s chief supply chain officer.
Fenske said the company jettisoned slow-selling items as well as many of the special counts and custom sizes it made for individual retailers. Fenske said that, as pandemic restrictions eased, Kimberly-Clark was able to be more thoughtful about the items it brought back. She said the company carries about 30% fewer product lines in North America than it had at the start of 2020.
PVH, which owns Tommy Hilfiger and Calvin Klein, embarked in 2020 on a plan to cut more than a fifth of its offerings to focus on what it calls “hero” products—those that make up an essential part of someone’s wardrobe.
Some companies said the culling of less-popular products opened up space for new lines.
Georgia-Pacific stopped selling 164-sheet rolls of Quilted Northern toilet paper because its larger rolls were better for consumers who valued longer-lasting rolls, said Kim Burns, senior vice president of supply chain for Georgia-Pacific’s consumer products group. Burns said the company has subsequently invested more time and money in new product lines, such as toilet paper with a scented tube that acts as a bathroom air freshener.
For other companies, the supply-chain shock provided a real-life experiment in how trimming product lines could improve productivity without hurting customer satisfaction. “It was quite shocking as we parsed it out to see we were using a lot of our buying power to really not get much of a return on investment,” said Nick Jensen, vice president of product at Malouf.
The Logan, Utah-based furniture company has reduced its lines to about 3,500 product choices, down from almost 11,000 items before the pandemic. Jensen said the company is adding new items more carefully these days.
“If we have 15 different colours and three shades of grey, it’s a paralysing choice,” Jensen said. “It’s kind of forced us to be much more intentional versus throwing a lot of things at the wall and hoping that they stick.”
—Suzanne Kapner contributed to this article.
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CIOs can take steps now to reduce risks associated with today’s IT landscape
3 min
As tech leaders race to bring Windows systems back online after Friday’s software update by cybersecurity company CrowdStrike crashed around 8.5 million machines worldwide, experts share with CIO Journal their takeaways for preparing for the next major information technology outage.
IT leaders should hold vendors deeply integrated within IT systems, such as CrowdStrike , to a “very high standard” of development, release quality and assurance, said Neil MacDonald , a Gartner vice president.
“Any security vendor has a responsibility to do extensive regression testing on all versions of Windows before an update is rolled out,” he said.
That involves asking existing vendors to explain how they write software, what testing they do and whether customers may choose how quickly to roll out an update.
“Incidents like this remind all of us in the CIO community of the importance of ensuring availability, reliability and security by prioritizing guardrails such as deployment and testing procedures and practices,” said Amy Farrow, chief information officer of IT automation and security company Infoblox.
While automatically accepting software updates has become the norm—and a recommended security practice—the CrowdStrike outage is a reminder to take a pause, some CIOs said.
“We still should be doing the full testing of packages and upgrades and new features,” said Paul Davis, a field chief information security officer at software development platform maker JFrog . undefined undefined Though it’s not feasible to test every update, especially for as many as hundreds of software vendors, Davis said he makes it a priority to test software patches according to their potential severity and size.
Automation, and maybe even artificial intelligence-based IT tools, can help.
“Humans are not very good at catching errors in thousands of lines of code,” said Jack Hidary, chief executive of AI and quantum company SandboxAQ. “We need AI trained to look for the interdependence of new software updates with the existing stack of software.”
An incident rendering Windows computers unusable is similar to a natural disaster with systems knocked offline, said Gartner’s MacDonald. That’s why businesses should consider natural disaster recovery plans for maintaining the resiliency of their operations.
One way to do that is to set up a “clean room,” or an environment isolated from other systems, to use to bring critical systems back online, according to Chirag Mehta, a cybersecurity analyst at Constellation Research.
Businesses should also hold tabletop exercises to simulate risk scenarios, including IT outages and potential cyber threats, Mehta said.
Companies that back up data regularly were likely less impacted by the CrowdStrike outage, according to Victor Zyamzin, chief business officer of security company Qrator Labs. “Another suggestion for companies, and we’ve been saying that again and again for decades, is that you should have some backup procedure applied, running and regularly tested,” he said.
For any vendor with a significant impact on company operations , MacDonald said companies can review their contracts and look for clauses indicating the vendors must provide reliable and stable software.
“That’s where you may have an advantage to say, if an update causes an outage, is there a clause in the contract that would cover that?” he said.
If it doesn’t, tech leaders can aim to negotiate a discount serving as a form of compensation at renewal time, MacDonald added.
The outage also highlights the importance of insurance in providing companies with bottom-line protection against cyber risks, said Peter Halprin, a partner with law firm Haynes Boone focused on cyber insurance.
This coverage can include protection against business income losses, such as those associated with an outage, whether caused by the insured company or a service provider, Halprin said.
The CrowdStrike update affected only devices running Microsoft Windows-based systems , prompting fresh questions over whether enterprises should rely on Windows computers.
CrowdStrike runs on Windows devices through access to the kernel, the part of an operating system containing a computer’s core functions. That’s not the same for Apple ’s Mac operating system and Linux, which don’t allow the same level of access, said Mehta.
Some businesses have converted to Chromebooks , simple laptops developed by Alphabet -owned Google that run on the Chrome operating system . “Not all of them require deeper access to things,” Mehta said. “What are you doing on your laptop that actually requires Windows?”
