The Business & Psychology of Curation as a Service (CaaS)
If you've ever found yourself walking up and down the cereal aisle fretting over what to buy, you’ve fallen victim to the classic paradox of choice. Having a wealth of options sounds like a blessing, but science has confirmed that you really can have too much of a good thing. In one famous experiment, a couple of Ivy League researchers found that grocery shoppers bought more gourmet jams when there were 6 options on the shelves as compared to 24. Not only that, the shoppers who chose from the smaller selection were more satisfied with their purchasing decisions.
It’s hard to experience FOMO if you went for the only grape jelly on the shelf.
There’s not enough toast for that
Despite a number of studies that have since confirmed and expanded upon these results, you’re still likely to find yourself experiencing choice paralysis in most traditional retail settings. And if you’re one of the rare few unimpressed with the condiment selection at your local grocer, just try typing “jam” into your Amazon search bar (I got a whopping 434,040 results upon last check). It seems that no one could use a quick psychology lesson more than our favorite ecommerce destinations.
User reviews and suggestions are a nice idea, but when you’re comparing 30 blenders with 4+ star ratings, exasperated buyers like me might just pick a random option in their price range and move on. This selection conundrum explains the recent rise in Curation as a Service (CaaS) in online retail.
The rise of CaaS
BirchBox, TrunkClub, and other subscription boxes pioneered the ecommerce strategy that boldly told customers, “here are a few options, take it or leave it.” Take a look at TrunkClub’s $350M exit if you’re curious how that worked out for them. Now we’re seeing a new wave of online retailers taking ever narrower stances on what they offer to their buyers.
Here are a few up-and-comers that are doing CaaS right:
Brilliant Bicycles: Rather than paying out the nose at a hip used bike shop or wading through sketchy craigslist posts, Brilliant Bicycles makes it easy to find a hip, affordable bike for cruising city streets. Offering two bike options with a limited color selection, the site demands very limited thought from their buyers in the decision-making process. Throw in a customer-friendly assembly and delivery plan, and you’ve got a “brilliant” business.
Nice Laundry: For the dapper YoPro, assembling a snazzy collection of dress socks can be an expensive and tedious endeavor. Enter Nice Laundry, making it (relatively) cheap and simple to get a drawer-full of snappy socks. Though they offer the traditional subscription service, you can also make a one-time purchase of 6 pairs. No mixing and matching necessary, simply choose from one of their curated collections and boom, you’ve got a week’s worth of fresh socks.
Casper: If the idea of a mattress startup sounds silly to you, maybe their recent $55M funding round will make you think again. Casper offers one type of mattress in 6 traditional sizes and sells them direct to consumer. Their 100-day return policy and simple packaging making the traditionally overwhelming mattress-buying process effortless and remorse-free. (Check out Away for a startup taking a similar approach in disrupting the luggage space).
The future of ecommerce
Admittedly, these services won’t work for everyone. Die hard hipsters will happily scour shop after shop to find the perfect vintage Peugeot bike with matching handlebar tape. But for the many less discerning buyers, CaaS is a welcome blessing. It’s important to note that winners in this space build in additional simplicity to make the purchasing process extremely easy. They’re going direct-to-consumer, and making delivery, assembly, and returns as simple as possible. Together, these factors create a seamless, stress-free purchase experience that translates into happy customers and high conversions.
The Amazon’s and Jet.com’s of the world would be wise to take note of how these startups are capitalizing on cognitive psychology to disrupt traditionally crowded industries. Last year’s unveiling of Amazon’s Launchpad, a boutique platform focused on startup goods, represents a positive step towards recreating the intimate feel that CaaS companies provide. Done correctly, this could bring well-deserved attention to the CaaS trend and encourage more retail startups to simply focus on one product and do it right.
