If a product line is underperforming then it makes sense to remove it. Or maybe not, if the law of unintended consequences kicks in, as Sweden’s Naked Juicebar discovered.
When the smoothies-to-snacks business discontinued a children’s-sized cup it found this resulted in a loss of overall drinks’ sales, a result that might have been expected.
What was not expected, however, was that when the kid’s cup was removed, the data showed an equivalent loss in sales across the premium blends on offer – a 10% decline across the board for a range that wasn't even offered in the children’s cup size.
“In the world of behavioural economics we always want to be measuring so we can look for unintended consequences,” behavioural economist Sonya Friedrich told a recent behavioural science event.
Brought on board to explore the reasons behind a downturn in Naked Juicebar’s business, Friedrich’s initial task was to restrain the founder from making wholesale changes.
“We need to prove that the downturn has actually been caused by what we think it [has],” she explained. “What we want to do is prove, one nudge at a time, that it works for your business – because that’s how you now build business – rather than actually do twenty things at once and then wonder which one worked.”
Hence the removal of the kid’s cup to establish whether this would reduce overall drink sales across the franchise. But the decline in premium blend sales changed what happened next – which was originally planned to be the reintroduction of the children’s cup in a nudge experiment.
“We wanted a compromise effect in one [franchise] and an attraction effect in another, so we could learn which one actually gives the best result for the business,” said Friedrich.
The realisation that there wasn’t actually a conversion to the other products, however, changed that view. “We’d lost those customers by deleting the kid’s cup so we didn’t want to just reintroduce the kid’s cup because those customers have gone.”
Read more on what Sonya Friedrich did next in WARC’s report: Piloting deletion: Naked Juicebar’s reverse nudge.
Sourced from WARC