REI Makes Choosing Easy By Denise Lee Yohn

One of the highlights from the recent 2011 BRITE Conference was meeting IRL Denise Lee Yohn, a brilliant 'brand as business' consultant who regularly inspires me with her insights about brands, consumers and retail experiences.

BRITE - and more specifically Sheena Iyengar, author of The Art of Choosing - got us thinking and talking. After multiple Twitter, phone call and email exchanges during which we explored perspectives on choice and customer frustration, retail innovation and how to improve the overall consumer experience, we decided on a blog series about choice in the retail experience.

This guest post about REI and chosing represents Part 1 in a two-part blog series with my colleague, Denise Lee Yohn. In it, Denise  addresses choice from her perspective as a consulting partner who helps retail companies operationalize their brands to grow their businesses. Next week, my post on the topic will appear on her blog - Brand as Business Bites.

REI Makes Choosing Easy

by Denise Lee Yohn

Over 900 brands of products. 174 models of sleeping bags. 105 kinds of mens socks. How do you navigate the huge product line-up at REI

Quite easily, actually.

Somehow, REI, a big box retailer that sells outdoor recreation gear, sporting goods, and clothes out of retail stores of up to 95,000 square feet, as well as catalogs and its website, manages to make a broad product assortment manageable. Actually, it’s more than manageable – shopping at REI is real treat.

REI has figured out how to overcome the choice conundrum that plagues most large retailers (large in terms of size of store, e.g., 50,000 sq. ft., not necessarily in terms of the number of stores).

The choice conundrum results from two opposing factors. On the one hand, large retailers want to offer a large selection of product. The more options you offer, conventional wisdom goes, the more likely you are to be able to meet customers’ needs. There’s an efficiency factor too – as long as you’re going to be paying for all that real estate, you should fill it up to maximize sales potential. And then there’s the desire of many retailers to surprise and delight customers through the shopping experience. They believe the wider your selection, the more ways to entertain people with opportunities for discovery.

But there’s a growing body of research that proves too much choice is a problem. As I have written previously, it’s a fact that when faced with too many choices, consumers make poorer choices, derive less satisfaction from their choice, and may actually delay or discontinue their purchase.

So, what’s a retailer to do?! One of the thought leaders in the field of choice is Sheena Iyengar, S.T. Lee Professor of Business, Columbia Business School. Based on her research, Iyengar recommends four ways to improve the choosing experience:

- Cut – get rid of redundant looking options
- Categorize – organize your offerings so that consumers better understand their options (see a previous post on this titled The Fundamentals of Choice)
- Condition -- gradually introduce consumers to more-complex choices so they don’t feel overwhelmed
- Create confidence -- use expert or personalized recommendations to help people make better choices and to feel better about making them< It’s this last approach that is REI’s secret sauce. Well, I guess it’s not so secret. Examples of how REI uses expertise to create confidence are abundant.  First, there's the in-store signage.

Signs like “How to Choose a Sleeping Bag” help customers understand the differences between options and clarify what their needs are. Case in point: I hadn’t ever thought about how I might need a different bag than a man would, but thanks to REI, I feel more knowledgeable and equipped with the right bag.

Hang-tags are another way REI leverages expertise to point people to the right product.

Their tags tell you what the product is good for, how it compares to other options, and what distinguishing features it has. The tags and signs are simply designed and expertly written, so they make a wealth of information accessible and digestible.

On its website, REI uses detailed product specs and reviews to help people make confident choices.

The product specs answer practically every question you might have. And for product reviews, they don’t stop at a numerical rating and simple comment box. The review protocol is thorough, so if the reviewer completes all the fields, you can see where the reviewer is from, what kind of person the reviewer is (avid adventurer vs. casual/recreational vs. gym rat, etc.) and their preferred gear style, if the product was a gift, the product’s pros and cons, best uses, and the bottom line. All of this goes a long way to re-assure a wary customer.

Perhaps the most significant example of creating confidence through expertise is the REI sales associates.

They’re knowledgeable, friendly, and available – a powerful combination. When you don’t know something, they don’t make you feel stupid; when they don’t know something, they find another associate who does.

A paper from Strategy+Business titled  A Better Choosing Experience [free registration required] that Professor Iyengar co-wrote concludes with the following observation: “Your goal is to invite consumers to enter into a collaborative, mutually beneficial relationship with you…In the short run, you are helping them navigate a bewildering and even debilitating world of options. In the long run, you are inviting them to choose you.”

If REI’s phenomenal financial results are any indication, (in 2010 sales were up 14%; profits, 15%; same store sales 8.1%) many people are choosing REI – including me!

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Thank you, Denise! I'm eager now to visit an REI to experience for myself how easy they make choosing.

Having read Denise's post, what do you look for when you're choosing from a multitude of products? What makes your purchase decisions easier?

When you consider choice and your retail experience from your customers' perspectives, how do go about creating an environment that generates confidence in your customers?


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