Does the breadth of your offering create or steal customer value?

Does the breadth of your offering create or steal customer value?

I just spent 10 minutes thinking unkind things about Eddie Bauer. I even shouted an anguished swear word, piercing the silence of my otherwise quiet home. My husband Nick had an overnight guest – our toddler grandson – while I was away and had forgotten to fold up the Eddie Bauer portable crib. Trying to be serious in my home office with a baby crib in my eye’s sight was not working for me, so I decided to take on Nick’s assigned chore and put the crib away.

The task should be straightforward I thought. (It’s not IKEA furniture after all with one page of instruction containing no words.) It seemed like I should have been able to unlock the crib’s sides by squeezing plastic handles to collapse the unit, and then put the far-more-compact unit into its zippered case. But as I started, Rube Goldberg came to mind.

Not one of the switches (hidden in the handles) that unlock the structure worked completely, which I didn’t realize until the zippered case appeared too narrow to hold the folded crib. Should I have pressed the plastic buttons at each corner while simultaneous pressing the handles? Or did I not press the handles correctly? Unsure, I tried many combinations until I finally got the crib to a far more compact size. (The buttons, by the way, turn out to be decorative.)

Then I realized the fabric storage holder has two compartments and the one I was trying to fit the crib into was for the mattress, not the crib. It took me another 5 minutes to secure the crib and then its mattress in the right compartments and with the right angle, so I could wheel the unit into our storage closet.

I get that companies want to expand their offering. I often suggest “moving up the food chain” to clients whose solution set is too narrow to solve pressing customer problems. Robert Finfrock moved from selling precast – prestressed concrete building components to constructing entire buildings. His is an American success story at its finest.

Also, the most profitable growth strategies often involve selling more to the same customer, as customer acquisition costs can be high. Amazon’s “Prime” shipping subscription and Walgreen’s move into stocking frequently purchased groceries reflect this strategy.

Finally, customers value one-stop shopping. In an era of entirely too much choice, consumers are drawn to brands whose product design or merchandising skills they trust. We want someone to simplify our choice set, as too much choice paralyzes us. It adds frustration, not delight. Target took market share from Walmart using this principle. And Madison Wisconsin’s SubZero moved from providing high-end refrigerators to being a high-end kitchen brand by acquiring Wolf ovens and adding a German dishwasher to its offerings.

But Eddie Bauer’s move from clothing to baby gear is moving out, not up, and into a category that has nothing to do with casual outdoor clothing. (The fact that Spiegel, the now defunct catalog company that competed with the once mighty Sears catalog, owned Eddie Bauer from 1988 to 1993 may explain the diversion.) I would trust Eddie Bower’s design choices for flannel shirts for my husband. But trust Eddie Bauer for baby gear? Or home soft goods like comforters and sheets? Is this breadth why the company can’t hold a candle to Patagonia and North Face, despite trying?

Of course, the retailer likely outsourced design and manufacturing of the crib. But what gives Eddie Bauer’s merchandisers the ability to source the right crib, one that makes a visit from a child effortless at both bedtime and clean up the next morning? A poorly chosen crib won’t ruin a grandchild’s visit, but it does detract from the crib’s brand.

The lesson: As you enter the New Year and think about how to grow, be careful in how you add to your offering. Lean more towards moving up one food chain—customer needs that are related in some way—versus moving out by tacking on unrelated products and services. Coach was smart to acquire Stuart Weitzman shoes as it tries to become a more upscale design brand. Duluth Trading’s “workshop” items enhance its brand. But categories like Eddie Bauer’s baby crib that have no intersection with competencies or other offerings bring incremental revenue at the cost of operational complexity and brand image.

Does your offering make sense? Does its breadth create customer value or merely confuse? Would a new customer identify a guiding principle – a brand promise – running as a nerve center through your offering? Or would your line look like a hodgepodge result of managers seeking growth from anywhere and anyone?

More articles by Kay Plantes

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. She resides in San Diego, California but still considers Madison home. She is the author of Beyond Price.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN Media, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.