Saying that the current crisis is helping and has helped Mercadona achieve the success it currently has would not be entirely fair because Mercadona’s success has already lasted more than five years. However, it must be recognized that the current economic situation is causing price sensitivity not to be the main purchase motivation of a market segment, but rather that all or almost all consumer segments have the price as the variable of choice. That is, if the price is the main driver of purchase for most consumers, Mercadona has hit the nail on the head and can find in it a part of the reason for its success.
In any case, to attribute all of Mercadona’s success to segmentation, and price sensitivity would be a conclusion or a simplistic view of reality. There is, at least, a second factor known as the “paradox of choice” (paradox of choices) that explains another part of the success of the distribution brand. Barry Schwartz argues that welfare is achieved with greater independence, greater individual freedom, and that to have greater freedom of choice you need the greatest number of possible options to choose from.
But the paradox according to Schwartz, is that the more options we have to choose, the more dissatisfaction and guilt will be generated and therefore greater unhappiness will result in the consumer. He exemplifies the paradox by explaining that, when a few years ago he bought some jeans, he only had one option to choose from. Having only one option did not generate anxiety for the election, nor guilt for the potential error of not choosing well. When you only have a purchase option, you use less time because you do not evaluate the alternatives; they do not exist. Once the product is chosen and purchased, there is neither dissonance nor repentance in the election since you can not have chosen any other Texan anymore, nor is there an option. In the case of making a mistake in the election (the trousers do not fit well, for example),
Currently, and before the point of sale (purchase) ask us, we ask if we want it higher or lower hip, wider or narrower leg, regular or wide waist, washed stone or unwashed, and etc. This consumes us a lot of time, it tires us and it raises doubts. In the same way that once bought the product, our doubt will grow and if we feel that the pants, does not finish adjusting, then we will feel guilty for not having chosen any of the other 100 possible combinations or Texans.
It is evident that this will happen more in purchases of products of high involvement but not so much in those of routine or habitual purchase, however, the current situation causes the price as a purchase driver to convert some purchases of habitual behavior into purchases of implication.
If this theory is true, Mercadona would be right in its policy of simplifying references. Only the MD and the leader of the category (although not always the leader), on the one hand satisfies the demand for low prices and on the other hand solves the paradox of the election. Is this a marketing strategy thought by Mercadona or pure coincidence?
Is Apple still the same strategy? What do brands like Danone or Bimbo do then, for example, offering so much variety?
The answer is not easy but to our knowledge, it is evident that the paradox is not always true and only partially fulfilled. On the one hand, it seems clear that consumers feel more independence and freedom the more choices we have, and on the other, that there is an overestimation of the consumer’s ability to manage, deal with all possible options.
Part of the solution could then be to properly categorize the offer so that the consumer:
1. I understood very well the options you have and,
2. Let’s turn the election process into a positive experience
Market research and specifically conjoint analysis techniques can definitely help us to solve this situation. Specifically, the new adaptive models of conjoint, allow to work with many variables at once (products, prices, packagings, ….) So that the consumer is choosing in a simple and orderly manner. The result is a prioritization of the variables of choice and therefore the optimization of the supply arriving to determine which of the options or products are advisable to offer, eliminating what does not generate utility for the consumer.