Too Much of Choice? That Might Not Be A Good Thing - Market Research & Behaviour analytics

Too Much of Choice? That Might Not Be A Good Thing

ByHimanshu Vashishtha

Too Much of Choice? That Might Not Be A Good Thing

Clothes or toys, mobile phones or investment plans, offline or online, retailers are swamping us with choices, far more than you and I could conceivably peruse. While earlier economic theory, as well as conventional wisdom, would suggest that we would always be better off with more options ( we could just ignore the ones we didn’t  like),   empirical evidence shows that excessive choice, be it in picking a pair of jeans or choosing your life partner may not always be such a good thing.

“Choice overload” — the negative psychological, emotional, and behavioural effects of having too many options to choose from – can leave us dissatisfied with the choice we made or even result in “behavioural paralysis” where being inundated with choices hinders our ability actually to make a choice and we end up making no choice at all.

Even if we do make a choice, the conundrum of having to choose from an endless array of options may make us less satisfied with the result than if we had lesser options to choose from. When there are plenty of options to consider, it is easy to imagine the attractive features of alternatives that you didn’t opt for, which would make you less satisfied with the alternative that you have chosen.

In a classic field experiment, some grocery store shoppers were offered the chance to taste a selection of 24 jams, while others were offered only 6.  It was found that sixty percent of customers were drawn to the large assortment, while only 40 percent stopped by the small one. However, what was intriguing was that almost 30 percent of the people who had sampled from the small assortment decided to buy jam while only 3 percent of those that stopped at the two-dozen array purchased a jar.

For long, businesses have operated on the premise that the more choices people have, the better off they are. However, studies have shown that the relationship between choice and well-being is not always linear.  The choice may be empowering but its link to satisfaction is not as straightforward as one would have assumed. 

When does Choice overload manifest itself as a problem? Here are some of the likely scenarios:

 Time-bound decision-making – How quickly do I need to make a choice?

Picture this scenario –  you are on the phone line with the pizza takeaway guy rattling out a host of permutations and combinations of different pizzas and toppings, and before you can even comprehend them all, you compel yourself to place your order within the next 60 seconds or so. The difficulty in having to choose from a seemingly endless array is inevitably compounded by the added pressure of making a choice within a limited time span, with the consequence of reduced confidence in your choice and lower satisfaction levels.

Presentation – How well is the assortment classified and organised?

Presentation is key.  When stores are ill-organised or in no logical order (a common encounter at factory seconds), consumers expend greater time and effort in rummaging for their preferred product with a higher probability of giving up mid-way.

The complexity of the Choice-set – How identical or differentiated and varied are the products? 

Differences in colour, shape, texture, and design make decision-making an onerous task vis-à-vis choosing between options that differ with respect to, say, just any one aspect.

Choice overload is also often experienced when product nuances are small and seemingly insignificant. Consumers may largely be indifferent to minor differences in mobile size or specs, but these nevertheless add to the complexity of the decision-making task at hand. Product offerings that do not differ greatly from each other cause cognitive strain for consumers.

Preference Uncertainty – How well do I know what I want?

The more you know about your preferences, the easier it is to make a choice. Choice overload is exacerbated when consumers do not have clearly defined preferences to lead their decision-making, which may also be due to limited knowledge or understanding of the product category. On the other hand, those with significant expertise or exposure to the product category are likely to have preferred characteristics in a product clear and articulated, which in turn would facilitate their decision-making. For example, if you are certain that liquidity is most important for you, it would be easier to navigate and weigh those different investment options and make a choice.

Perceived risks – God forbid, what if I make the wrong choice?

In situations where the stakes or the perceived risks of making a wrong choice are higher, or when significant time or resources would be required to research/compare options, consumers may dilly-dally or indefinitely put the decision on hold. 

What does all this mean for the Marketer? What could be the workarounds?

Better Choice Architecture

Starting with the design, are you presenting your products in a way that makes it easier for the consumer to make a choice? The complexity of choice can be reduced by streamlining the assortment, providing key information, highlighting product USPs, and allowing for relevant comparisons.

Better Information Architecture 

Empower your customer with salient and meaningful information in an easy-to-comprehend format and the time they would need to process that information so as to enable them to make an informed choice, which leaves them satisfied. One can leverage customers’ tendency to employ heuristics or short-cuts to decision-making – for example, by labelling products as, say, ‘best sellers’, or highlighting recommended products.  Algorithmic recommendations, such as those used by Spotify or Amazon, which display/ recommend products based on the user’s browsing/ purchase history, are also proven to be extremely helpful.

Presenting a limited assortment

It may not always be a simple case of less is more across the board. Rather than just reducing the number of options, one may need to devise ingenious ways of reducing the cognitive load associated with decision-making. For example, you can promote the season’s collection by depicting just that in your catalogue and the main section of your store, and the rest of the items may be showcased in other sections.

De-risking the choice

Providing social proof to make a choice, return policies, warranties, money-back guarantees, lower the risk factor for the consumer thus facilitating decision-making.

More isn’t always better as can be seen above. A thorough understanding of consumers and their preferences, the product and market offering,  would help to streamline the assortment, to present consumers with the relevant information, to enable their use of heuristics to cut through the clutter if need be, and also to arrive at that sweet spot in terms of assortment size.

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Himanshu Vashishtha administrator

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