I really wanted to add a section about elasticities and how reducing differentiation would make their products more elastic. I have to remind myself to hold back from getting too in the weeds.
"For example,e Dollar General announced earlier this year that it would pare back products like mayonnaise from five or six to just a few. " - I really hope they do some empirical analysis or A/B testing on this. Sometimes when there's too much choice in the grocery aisle, I end up spending a lot of time deciding. I wouldn't be surprised if 'too much' choice effects total per trip sales in some way.
Another interesting avenue for the stores could be to rotate the products. Rotate a subset of the six mayonnaise. Maybe that would be too annoying for the customers.
Just some of my 'random' thoughts. Great article, as always!
The growth in Aldi's popularity over the past few years has probably got stores realizing that they could get more money with fewer products. I do like the idea of a rotating special version, but that's also something that Aldi does!
Jadrian, stop snooping in my lesson plans. How did you know I was going to wrap up perfect competition and transition to monop comp this week? 😉
Great stuff, sir!
I always feel a little extra pride when I find an article that matches my course sequence!
I read a great article just this week about the cost of choice as it applies to the color of cars....
Why do you think I had to space these out! I found them around the same time.
I am adding two of the articles in your post to help discuss differentiation and efficiency. Thanks again!
I really wanted to add a section about elasticities and how reducing differentiation would make their products more elastic. I have to remind myself to hold back from getting too in the weeds.
"For example,e Dollar General announced earlier this year that it would pare back products like mayonnaise from five or six to just a few. " - I really hope they do some empirical analysis or A/B testing on this. Sometimes when there's too much choice in the grocery aisle, I end up spending a lot of time deciding. I wouldn't be surprised if 'too much' choice effects total per trip sales in some way.
Another interesting avenue for the stores could be to rotate the products. Rotate a subset of the six mayonnaise. Maybe that would be too annoying for the customers.
Just some of my 'random' thoughts. Great article, as always!
The growth in Aldi's popularity over the past few years has probably got stores realizing that they could get more money with fewer products. I do like the idea of a rotating special version, but that's also something that Aldi does!
I need to bookmark this for my micro course next semester!
It helped that I had just finished that lesson when I found the article.