Consumer choice

Greg Ip published a typically thoughtful article today in the Journal on the supply chain crunch and its impact on globalization. I won't recapitulate the whole thing here, but at the end he makes the interesting statement that the new post-COVID, less globalized world will be "less able to delight consumers with ever more choice at ever lower cost."

This surprised me a little, because as Ip well knows, behavioral economists long since established something that we all intuitively know, which is that we are exhausted by more choice and operate better in contexts where we have fewer things to choose from. Which is why people order combos at Mexican restaurants and sushi platters and why we approach display cases at supermarkets more or less knowing what we want. Most importantly, it's why modern 401k plan design limits the number of funds available to plan participants to 10 or 12 at most, so people don't work too hard making decisions that are more likely to harm than help them. 

Which isn't to say that we don't take some pleasure from the sheer cornucopia experience of going into the grocery store, but for the most part to diminish the cognitive load on ourselves we seek shelter in brands. Brands do need to grow and adapt, no doubt, which is why failure to listen to customers leads brands to fall into disrepair, as Kraft Heinz learned all too well when it adhered too zealously to Zero-Based Budgeting and its brands got dusty.

I suspect that in the product development world there are people who run numbers on the marginal return of investments in innovations. Variants and flavors get thrown out there and test-marketed. I am often quasi-impressed with the sheer range of Triscuits available in stores, though I've long since gravitated back towards the center, to a lower-sodium non-flavored one. So the Nabisco people made a slight innovation and found me.

But lots of brand innovation is desert blooms, trial balloons sent out and then retracted for failure to catch momentum. Because we can't be trying new shit all the time. It's exhausting. Ultimately most people want to limit the number of decisions they make in a day, like Jeff Bezos, who famously aims for one or two good ones.