If you’ve ever visited the snack aisle in a supermarket, you’ve probably had the experience of being taken aback when you look at the options laid out in front of you. Even when you know exactly what you’re looking to buy, down to the exact product, brand, flavor, and size, with a vast selection right in front of you, chances are you have second-guessed yourself.
The more choices you have, the harder it gets to make a decision. This psychological concern has a huge impact on a customer’s buying decision. In this article, we’ll talk about how the more options your customers have, the less likely they are to buy.
Table of Contents
Understanding Choice Overload or OverChoice
Do You Still Need to Offer Choices?
How Many Options Should You Offer?
Why Is Making a Choice Difficult?
Big Brands and Multiple Choices
Limiting the Number of Choices in Offer Pages
Back to that supermarket scenario. You’re still in that snack aisle and have not yet purchased a thing. In the first scenario, you knew what you wanted but still thought twice about your decision.
In another scenario, imagine looking at the aisle when you don’t know what you want, aside from thinking you want something from a broad category like “chips” or “crackers.” In such a situation, there’s a good chance that you’ll be truly overcome by the number of choices you face.
You take a step back and think to yourself, “what is it exactly that I want?”
“Is my first decision the right one? What if another snack is more delicious and can give me more satisfaction in life?”
Ok, so the life satisfaction question can be a bit too much, but you get what I mean. How is it that the more choices you have, the harder it is to decide, and eventually, to be satisfied?
This is called the Paradox of Choice.
We want to be able to choose in order to get something we really want, but the more choices we have, the more confusing it becomes, and we end up less satisfied.
Understanding Choice Overload or Overchoice
Choice overload, or overchoice, is a situation in which a person is faced with too many choices, especially in a retail situation. There are numerous reactions to this issue, including decision fatigue – that is, a worsening ability to make the right decisions.
Other reactions include choice deferral – avoiding being forced to make a decision, including opting to leave the shop – and choosing the default product instead of comparing options in detail.
A definitive study that examines this issue was conducted by Sheena Iyengar, a professor at Columbia University. In 2000, she and fellow professor Mark Lepper (from Stanford University) conducted an experiment to demonstrate how choice affected sales.
For this research study, they set up a table of jam outside an upscale grocery store over two Saturdays. There, research assistants dressed as store employees and offered samples of flavors of Wilkins and Sons Jams. They offered a choice of either 6 or 24 jams, with the selection rotating each hour.
Ultimately, the researchers examined the behavior of over 500 shoppers – 242 during the period in which 24 flavors were offered and 260 during the period in which 6 flavors were offered.
Initially, the results seemed to match the conventional thinking of the time – the more choices offered, the better it was for the business. 60% of shoppers who encountered 24 flavors stopped to take a sample compared to only 40% of shoppers who encountered six flavors.
However, the research did not stop there. It also looked at the buying habits of these shoppers – and that’s where the real information came to light.
Of the 60% of shoppers who stopped when 24 flavors were available, only 3% actually made a purchase. However, 30% of the 40% of shoppers who stopped for six flavors decided to buy.
When you break the numbers down further, over six times the number of people who bought jam when offered 24 flavors did so when offered just six flavors.
While the additional flavors may have been effective at grabbing shopper attention, it actually led to worse conversions.
This is an important lesson for both brick and mortar store owners and eCommerce retailers. While offering more choices may seem to be a clearly beneficial decision for your store, this is not actually the case.
Do You Still Need to Offer Choices?
As discussed above, limiting choices can be effective at increasing conversions. The logical progression of this idea is, of course, the idea that offering only a single option is the best way to increase sales.
However, this couldn’t be further from the truth. Too much choice is a negative, yes – but so is too little.
One study divided participants into three groups, each of whom was offered the opportunity to buy a new DVD player. The first group could only buy a Sony DVD player, the second group could only buy a Phillips DVD player, and the third could buy either of the two (though they had to choose just one).
When presented with a single choice, very few people were interested in making a purchase. Only 9% of the Sony group and 10% of the Phillips group wanted to buy a DVD player.
When offered a choice, on the other hand, a significantly larger proportion of people decided to buy. 32% of people in the group opted to buy a Sony DVD player, and 34% opted to buy a Phillips DVD player, with only 34% deciding not to make a purchase.
The difference in the conversion rate speaks for itself. When presented with even as few as two alternatives, people were far more likely to buy than when only offered a single item and no options at all.
This phenomenon is known as single option aversion, referring to how consumers are unlikely to pick even an option they like when they have no other alternatives offered to them. People don’t like to be forced, even if they want that something.
Picking when only a single option is available prevents them from comparing options. People are convinced that they are making a hasty or ill-informed decision when there is no other choice, even when everything points to be a good choice.
Both Choice Overload and Single Options can significantly reduce sales.
Thus, while too much choice should be avoided, so should too little choice.
How Many Options Should You Offer?
So, based on the studies mentioned above, it’s easy to determine that you need to offer more than one option, while also avoiding offering too many options.
But what does too many mean? At what point does a selection of options move from just enough to too many?
This tipping point varies depending on the customer. Some consumers may prefer having only two options, while others may want a slightly larger range. Still, others may do best when offered ten or more alternatives.
Before you cut down on (or increase) the options you offer, you first need to understand your specific consumer base. This means:
- you will need to test the number of options you offer; and
- you will need to truly understand your target consumer (creating a target persona, in this case, won’t hurt).
If you’ve been promoting several products, try cutting that number down to somewhere between three and five. On the other hand, if you’ve only been publicizing a single product, consider diversifying your marketing.
Look at ways to reduce or simplify choices for your customers. You may not be able to remove products from your store – but you can ask them questions to make a buying decision easier. Look for ways to help them decide and test to see how effective they are before implementing them across your business.
Finally, look at your social sharing prompts. Most online businesses ask customers to share their favorite products on social media, increasing their visibility. However, if you ask consumers to showcase your store on everything from Twitter and Facebook to LinkedIn and Digg, there’s a good chance that person will simply choose to move on without sharing even once.
Instead, analyze your store’s offerings and see which social media platform is best suited for your products. For example, you’ll get far more traction if you sell clothes when your products are showcased on Instagram or Facebook than you would from a Tweet.
Once you’ve narrowed down a list of social media websites to target, ask customers to promote your brand on those websites and those websites only. This allows you to limit the number of options you offer site visitors and increase the likelihood of them actually promoting your store.
Why Is Making a Choice Difficult?
As discussed above, too many choices can be challenging for consumers. However, this doesn’t explain why these choices can pose a challenge and why making a decision is difficult.
To put it simply, decision-making requires time and energy. You need to take the time to weigh your options and consider the pros and cons of each. The greater the number of options you have, the more items you have to analyze before you can make a selection you’re truly comfortable with.
However, this isn’t the only factor that affects your ability to choose between multiple options. Other considerations you need to keep in mind include:
1. The Decision-Making Timeline
There are seven parts to the decision-making timeline:
- Identifying the decision to be made
- Gathering the relevant information
- Identifying alternative options available to you
- Weighing the evidence
- Making a choice between alternatives
- Taking action – in this case, making a purchase
- Reviewing the decision and deciding whether or not you made the right one
Depending on where a person is on the decision-making timeline, having multiple options can be more or less effective.
For example, if someone is still on step one – that is, deciding whether or not they even want to make a purchase – having multiple options available can be attractive.
More options at this part of the timeline help reassure a customer that they will be able to find something that suits their requirements, whatever those may end up being.
However, when the same people reach step four, weighing the evidence, the number of choices will now become overwhelming rather than encouraging. In this step, they need to compare the alternatives available to them – the more the alternatives, the longer and more complex making a decision and moving on to the next step can be.
To overcome this challenge, it’s important to understand the mindset of your customers. What step in the decision-making timeline are they most likely to fall in? Will offering additional choices help or hinder them in making a purchase?
If you’re targeting a broad audience, it’s important to cater to all types of customers. This means providing choices and also providing decision-making support so that they can move down the timeline with ease.
If you’re going after a niche market, though, the fewer the options, the better at getting these potential customers to convert to paying customers.
One example of a brand expertly navigating the challenge posed by the decision-making timeline is Procter & Gamble. The brand reduced the number of SKUs for their Head and Shoulders shampoos from 26 to 15.
This reduction wasn’t too extreme and still ensured the customers had enough options to choose from if they were early in the decision-making timeline. At the same time, the reduced choice made the latter stages easier to move through as well.
The result? The brand saw a10% increase in shampoo sales from Head and Shoulders shampoos.
2. Preference Uncertainty
Here’s a question:
Do your customers know what they want?
Going back to the example mentioned at the start of the article, consider the feeling of standing in front of the snacks aisle at a supermarket without a clear idea of what you want to buy. You may know you want to buy chips – but there’s much more that goes into making such a purchase.
You need to decide what flavor you’re looking for, what brand you prefer, and what your budget is, among other factors. And this is just the basics – do you want organic, all-natural, salt-free chips? Are there ingredients that you need to avoid? Do you have any allergies that you need to take into consideration?
If you don’t know the answer to these questions, making a decision can be overwhelming. However, the more challenging situation is when you don’t have a preference.
Retailers need to be prepared to deal with “novice” customers – that is, those customers that do not really know what they want beyond a broad categorization.
For example, consider the Visa website. The company gives 29 different credit card options. Even if you have the time, looking through all the features of each credit card and weighing the pros and cons of each can be an overwhelming task.
To reduce the preference uncertainty, Visa allows customers to narrow down their list of options based on various filters, including their credit score, the additional features they would like, and their preferred provider.
The filters narrow down the list of options available, allowing you to quickly make a decision. This also effectively reduces the stress that would otherwise come with having to choose among the 29 options.
3. Decision Fatigue
Decision fatigue is perhaps the biggest reason that multiple choices can pose a challenge for customers. The term was coined by author and psychologist Roy F. Baumeister, who conducted experiments that demonstrated that people had a finite ability to exert self-control.
This ability sapped people of mental energy, and the more they had to control themselves, the less mental energy they had. This theory was then extended to apply to decision-making as well.
Baumeister and his colleagues visited a suburban mall to demonstrate that making decisions could actually mentally exhaust a person. There, they interviewed various shoppers about their time shopping and then asked them to solve math problems.
Shoppers were asked to solve as many problems as possible but were allowed to drop out at any point. According to their interviews, people who had made the most decisions while shopping were far faster to drop out. The more retail decisions they had made, the less energy they had to spend on math problems.
As you grow more mentally tired, you cannot complete crucial parts of the decision-making process, including making trade-offs and coming to a compromise. Thus, your ability to make an effective decision diminishes – and you’re more likely to make a mistake when forced to make a choice.
One way to reduce this problem is to simplify as many decisions you will need to make during a day as possible. For example, several major politicians and businesspeople, including Barack Obama and Mark Zuckerberg, cut down on the number of outfits available to them for daily wear to one or two.
This means that they don’t have to worry about what to wear each morning, reducing the number of unimportant decisions they have to make. Additionally, they also push the inception of decision fatigue further down the line, an important necessity when you’re responsible for making major decisions each day.
However, decision fatigue affects everyone, no matter the size of the decisions they have to make. This means that, where possible, our brains will look for a way reduce the number of choices it has to make during the day, including the ones we make when shopping.
So what can you, as a retailer, do to curtail decision fatigue?
One option, as already mentioned, is to cut down on the number of options available. This helps customers reach a decision quicker and more easily, as they can easily compare options. Another option is to make it easier for them to reach a decision.
Some steps you can take to do so include:
Highlight the Best Option
While it may not be possible for you to reduce the number of SKUs you have in your stock, you can highlight the best option to make it easier for customers to decide on which to buy.
One company that is extremely effective in doing so is Amazon.com.
Think about a customer searching for the term lipstick. Per the website’s search function, there are over 4000 results for this keyword.
This can, unsurprisingly, make reaching a decision complicated. Amazon.com highlights the option it believes to be the best of all of these products to make the process much easier on the consumer.
If you’re unsure about which lipstick to buy, you no longer have to choose between 4000+ products. Instead, Amazon.com has highlighted the fewer than ten options it considers to be the best – the two marked under ‘Editorial recommendations’ and the four under the ‘Amazon’s Choice’ banner.
Additionally, the ‘Amazon’s Choice’ lipsticks are further categorized by keywords. All of this reduces the decisions that customers have to make and cuts down on decision fatigue.
Curate and Personalise
One option to consider if you cannot cut down on the number of distinct pieces in your stock is to personalize the selection into smaller collections. This allows potential customers to make easy decisions when they visit your website.
This approach is popular among clothing brands and retailers like Forever 21.
As you can see, while the brand offers hundreds of clothing options, they also offer curated collections based on current trends and outfits appropriate to the season. This makes things significantly easier on website visitors – instead of browsing through everything on the website to find something event appropriate, they can simply browse through an already selected assortment.
Offer Clear Categorization
One of the best ways to reduce decision fatigue is to separate your inventory of products into clear, distinct categories.
Consider, for example, the Primark website. When you search for ‘lipstick,’ the website produces options for lipstick – but it also offers results that include cheek tints, lip scrubs, lip balms, and more.
These products are extremely distinct from each other – while someone may be looking to buy lipstick, they may not necessarily also be interested in purchasing lip scrubs or cheek tints. Their goal must have been to show that they have other related products.
However, presenting them with these additional options only increases the complexity of the decision that they have to make, reducing the likelihood that they will actually make a purchase.
Limit Trade-Off Decisions
When affected by decision fatigue, one of the first parts of the decision-making process that deteriorates is the ability to make effective trade-off decisions.
A trade-off decision involves choosing between multiple products or situations, all of which have some features that you consider to be important to you. Among the best-known examples of trade-offs in the retail industry come in dental care.
If you ever visit the toothpaste aisle of a supermarket, you’ll be bombarded with multiple product options from the same brand, each of which boasts a different specialty. For example, consider Crest toothpaste.
Among their catalog of products, they offer everything from enamel care and gum health toothpaste to whitening and deep clean toothpaste – and more.
This approach works if customers value one of the four mentioned options over the other three. If they’re looking for a whitening toothpaste above all else, for example, they can easily make a decision.
However, what if a customer is looking for a toothpaste that both boosts gum health and whitens teeth? What if they rank three or even all four attributes as equally important when deciding on a toothpaste variant?
In such a situation, the customer is forced to make a trade-off and compromise between values they hold important to make a purchase. This makes reaching a decision significantly more difficult than it would if the brand offered a toothpaste that included all four attributes mentioned above (gum health, whitening, enamel care, and deep cleaning).
Furthermore, when making trade-off decisions, customers must also contend with the challenge of anticipated regret. This concept means that, when making a decision, a person will also consider the possibility that they may regret the decision they make. They will then try to make a choice that will reduce this possibility of future regret – making decision-making all the more complicated.
Big Brands and Multiple Choices
Given the drawbacks of offering customers too many choices, the natural question to ask is why so many big-name brands still offer hundreds of different product options. If you walk into an H&M store or visit the Primark website, you’ll soon find yourself overwhelmed with the selection of products available to you.
The answer is simple – economies of scale. What this means is that, as larger retailers increase the scale of their operation, they receive certain financial benefits.
These benefits include everything from better wholesale costs to lower transport prices per option. This, in turn, allows these brands to offer their products to customers at a lower price.
Through the idea of economies of scale, large brands like H&M, Primark, Walmart, and Target position themselves as one-stop shops for affordable products that fall within their item categories. For H&M and Primark, this category is primarily clothing. Walmart and Target, as hypermarkets, sell a much broader category of products.
By serving as a one-stop shop, these retailers are also taking an important gamble – the people who come to buy one item will find themselves overwhelmed by not only the choices within each item but also the larger selection of products on offer. Furthermore, instead of turning them away, this selection will result in customers buying far more than they originally intended.
So, if you entered a large clothing retailer looking for a shirt for your father’s birthday, the wide range of products will mean that you not only buy the shirt you were planning to, you also leave the store with a dress for your sister, tops for yourself, and a new outfit for your child.
This is a gamble that a multi-million or multi-billion dollar business can afford to take. Unlike smaller competitors, their economies of scale mean that their cost price is lower. Additionally, they have a significantly larger capital amount they can fall back upon, which makes warehousing and storing a huge inventory much easier (and less costly).
As a smaller retailer, however, offering such a wide range of products will rarely work out as well for you. Instead, it’s important to reduce the number of choices you offer your customers and compete with big-name brands on quality instead.
Competing Even with Limited Choices
If you’re a clothing retailer, it can seem impossible to compete for shoppers with a name brand like Primark. After all, as discussed above, it is challenging (if not impossible) to try and beat them in terms of inventory and choices.
However, as long as you have quality behind you, you can easily turn this lack of choice into an asset instead of a drawback.
Consider, for example, another well-known brand in Burberry. If you’ve ever visited the flagship stores of both Burberry and Primark, you’ll immediately notice that Burberry offers a far smaller selection of products than Primark does.
However, of the two names, it is Burberry that is associated with luxury and coveted.
This is because, instead of competing on a range of products, Burberry is competing with Primark on product quality. Clothing shoppers looking for items that will last for a long time are more likely to visit a premium store with fewer options than a fast-fashion department store.
Furthermore, the same high-end store makes the purchasing process significantly easier. They do not have to choose between multiple options in each style, including cut and color. Instead, they have a limited selection, and they can focus on the factors that they really care about instead of getting overwhelmed with all the extraneous details.
Similarly, you too can attract customers to your website, instead of those of better-known competitors with a larger selection of products. Once you do, however, you will need to differentiate yourself from your rival businesses – and that’s where a more curated selection of products comes in.
If you’re a small business marketing to your customers, you don’t imitate the way big brands market to theirs. Your marketing strategies can be more personalized, more intimate. SMS Marketing, for example, is one of the best ways to reach out to your customers in a personalized way.
Also, instead of promoting a store-wide sale, smaller businesses can offer discounts per category or product line. People don’t need to know you have a little bit of everything -- instead, they have to know that your store has what they need.
Cutting Down Your Inventory
If you already boast a large and varied product inventory, figuring out how to cut it down to size can pose a challenge. After all, you have chosen to sell these specific products for a reason – so how do you now decide that certain products should no longer be featured?
The first and easiest way to do so is to look at sales. Are there are products that are consistently and significantly underperforming, especially in proportion to the overall sales in your store? If so, there is a good chance that you will be able to cut them from your offerings without much concern.
It’s important to remember to consider the unique situation of each product when making a decision. Some products may sell exceptionally well at certain times of the year but stay low sellers during the rest of the year. In such a situation, you may consider adding it as a seasonal product to avoid clogging up your product catalog during the rest of the year.
Another element to factor in is redundancies. Are you selling the same style of trousers in two almost identical shades? If so, you’re forcing your customers to make an unnecessary decision – there is no clear way for them to decide between the two, and keeping both options can instead serve to create decision fatigue. By removing one of the two options, you streamline the decision-making process significantly.
It is, of course, not always possible to reduce choices to an easily manageable number. When considering clothing retailers, for example, the reality is that businesses will always need to carry a multitude of sizes. Cutting down on sizes will not reduce decision options, they will only reduce the potential customer base.
A larger product inventory does not always mean more choices. Depending on product categorization and the reason behind the large inventory, having a wider variety can actually be beneficial even to retailers trying to keep options down to a minimum.
However, it is essential to provide customers with a way to navigate these offerings. When it comes to online clothing retailers, for example, they can have visitors filter down their choices based on factors such as type of clothing, gender, and size. Once those basic filters have been applied, you can then work on reducing preference uncertainty through more detailed categorization options, such as color, cut, length of sleeves, and so on.
Take, for example, the retail website Ajio.
Aside from refining product selection by gender, category, and size, customers can further narrow down their list of options by fabric, pattern type, neckline, and more. These filters take the place of what a salesperson would do in a brick-and-mortar store – asking you questions so that they can provide you with a carefully curated selection to try.
Instead, the website algorithm picks and chooses the products that fall within your required parameters. This can help narrow down a list of tens of thousands of clothing options to a significantly more manageable selection.
While Ajio cannot limit its product range without severely curtailing its potential audience, it can significantly reduce the number of decisions that said audience will need to make. This significantly increases the likelihood of conversions and helps boost sales.
Limiting the Number of Choices in Offer Pages
The greatest effects of the Paradox of Choice when it comes to native ads are not on the ad creatives themselves, but on the landing and offer pages. If you want your potential customers to proceed to the next step of your marketing funnel after they click on your ad, then you must be smart when applying the concept of choice in your landing pages.
The most common practices are as follows:
1. Two to Four choices
The sweet spot for the number of variants depends on the business, but when it comes to affiliate and eCommerce offers, it is between two to four.
Take for example this top-performing landing page for a dating offer.
2. Irresistible Package Deals
What if you only have one product and you can’t, for the life of you, create a variant out of it? Are you stuck with providing just one choice? Not necessarily! If that is the case, you can be creative in your marketing techniques.
One of the most effective ways to market a single product and still provide a choice is to give out package deals. So the first choice is buying a single item, the next choice is buying two of the same item for a small discount, and the final choice is buying several of the same item for a large discount.
Image from WPMayor
Give the customer the feeling that the more he buys, the more he saves! It’s a win-win situation. To further increase sales, you can include a sense of urgency in this situation, like a limited-time offer or a countdown.
The ‘Sweet Spot’ of Choice
For businesses that can curtail their number of options, the biggest question remains – as always – how many options to offer. How many toothpaste varieties or perfume options should you list on your website?
The answer to that will differ from store to store, depending on the products your sell and the audience you serve. In general, however, research suggests that the ‘sweet spot’ when it comes to choices sits somewhere in the range of 8 to 15.
Fewer than eight, and you risk a person feeling cheated and like they didn’t have enough choice to make a fully informed decision. Too many, on the other hand, and you risk overwhelming your customers.
More than that is the risk of escalated expectations. With a larger variety, the item you actually do choose is expected to be perfect. After all, you’re choosing that product over tens of similar options – your choice has to be the right one, or else you’ve wasted that decision (and your money).
The higher a customer’s expectations, the less likely you are to being able to meet them. This, in turn, increases your risk of facing negative consequences, like negative reviews.
A multitude of options when it comes to retail can seem like a good thing, but results beg to differ. Too many choices force people to constantly have to make decisions, which can drain them and cause burnout. This, in turn, can reduce the chance of conversions – and allow your customers to fall prey to the paradox of choice.
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