Design Fewer Products for Better Profitability
At the end of October 2008, I briefly suggested for designers to work with the business to make fewer products and focus their strategies during the recession. Here is a quote from HBR that sums-up this strategy:
Recent evidence suggests that the paradigm of “variation is value” may be shifting. More and more, consumers are conveying their preference for fewer choices and simpler customer experiences. For example, a Forester Research survey earlier this year noted that consumers are foregoing unlimited choices in the computing world in exchange for more “curated” choice, where providers sort through the possible applications for individuals and recommend a limited subset. Similarly, at a Future Agenda Conference in August, much of the conversation was about “less variety.” As one professor noted,”… fewer choices provide higher levels of satisfaction.”
The common thread across these views and others is that product proliferation triggers what Princeton philosopher Walter Kaufmann called “decidophobia” (the fear of making a decision). For some people, the complexity of choices becomes so overwhelming that they shut down.
My experience as a consumer visiting bookstores is a good analogy to this. I find greater joy shopping in smaller neighborhood bookstores than large chains such as Borders. Often I’m just browsing; therefore I don’t really need or want to see every book that is out there. I rather have a smaller curated range of books, so that I have the opportunity to review them in greater detail. I find this style of shopping much more satisfying.
If we look back at the consumer electronics industry, we can see a shining example in Apple and how they made a huge profit during our recent recession by making fewer but better products. How many versions of Apple smart-phones (iPhones) are there as compared to a brand like Nokia? Fewer products also mean that people are able to understand your range better.
Now this is easier said than done. It is a huge challenge to convince our sales and marketing colleagues to make fewer products, as most believe there is a correlation between sales volume and the number (as well as variations) of product SKUs. At least we know how to start this discussion; we adopt a user-centered approach and use human behavior as the common denominator between for both parties.
Quote Via: HBR blog.
Brian Ling (Design Sojourn)
Brian is a multidisciplinary Design Leader with more than 18 years of experience leading strategic design programs that drives successful Brands and Fortune 500 businesses such as GE, Philips, Nakamichi, Flextronics, Ericsson, Hannspree, and HP. His passion is in helping organisations leverage on Design Driven Innovation to make people’s lives better.