If Customers Ask for More Choice, Don’t Listen
Source: Harvard Business Review www.hbr.org
9:20 AM Monday May 14, 2012
by Karen Freeman, Patrick Spenner and Anna Bird | Comments (11)
This post is the second in a three-part series.
In his provocative book The Paradox of Choice, Barry Schwartz’s warns that giving consumers more product choices actually lowers their purchase satisfaction. Schwartz reasons that having too many options makes us fear missing out, which causes anxiety, analysis paralysis and regret.
But many marketers have dismissed Schwartz’s warning, arguing that today’s consumers expect a wide range of options and have learned to filter greater amounts of information. Marketers’ own research usually backs this up. When asked, consumers in these studies almost always say they want more choice. And, in fact, one of the top reasons shoppers give for not making a purchase is “couldn’t find the right option.” Understandably, therefore, marketers are reluctant to cut back on SKUs for fear of disappointing consumers and losing sales. Instead, companies continue to develop a growing array of niche products to fit every imagined need and aggressively promote them.
At the Corporate Executive Board, we’ve been exploring purchase behaviors in this world of infinite options. Our survey of over 7,000 consumers worldwide sheds new light on how consumers really feel about all this choice. (To download industry cuts of our survey findings, visit CEB’s Decision Simplicity resource center)
On the one hand, the majority of consumers in our study report that they have “just the right amount of information” and “just the right amount of choice.” Clearly, they don’t see a problem. Yet when we looked at what consumers actually do, rather than what they say, we get a different picture. Consumers spend far longer researching products today than they did in the past, and yet 70 percent don’t make a decision one way or another about which brand to buy until the point of purchase. Even after making a purchase, one fifth of consumers continue to research the product to check if they made the right choice. Forty percent, meanwhile, admit to feeling anxious about the purchase decision they made. All this suggests that consumers are actually overwhelmed, unable to effectively process the flood of product information and choices.
These are not the behaviors of well-adapted shoppers who have learned to navigate huge volumes of information effectively. These are the behaviors of overwhelmed shoppers who struggle to process information and unnecessarily agonize over otherwise trivial purchases. The problem is cognitive overload — the result of excess demands on our cognitive powers that lead to poor decision-making.
And this isn’t just a problem for consumers. Cognitive overload is bad for brands too. The harder consumers find it to make purchase decisions, the more likely they are to overthink the decision and repeatedly change their minds or give up on the purchase altogether. In fact, regression analysis points to decision complexity and resulting cognitive overload as the single biggest barrier to purchase.
How can brands reconcile this reality with consumers’ supposed desire for options? Smart brands reduce the effort of making choices without reducing the appearance of choice. Cutting back on less popular SKUs, for example, can actually increase consumers’ perception of choice, while making it easier for them to choose by helping them spot the right brand for them. Some progressive brands simplify product choice without reducing choice by helping consumers navigate and trust product information and weigh their options.
The antidote for overloaded consumers isn’t more options at the store shelf, it’s decision simplicity. For more on how to make purchase decisions simpler for consumers, see our article in the May issue of Harvard Business Review.