Choice Overload Impact on Consumers

Goals

To find research that supports the theory that today's consumers become overwhelmed with the number of choices when shopping and that a limited selection is actually preferable for the purposes of a press pitch.

Early Findings

Preliminary research indicates that the theory that today's consumers become overwhelmed with the number of choices when shopping and that a limited selection is actually preferable is supported.

CHOICE OVERLOAD

  • Professor of marketing at Kellogg, Ulf Bockenholt, states that "Having a choice is a very basic need," but too many choices can be a bad thing.
  • The phenomenon known as "choice overload" is the term applied to the "negative psychological, emotional, and behavioral effects of having too many options to choose from."
  • Having too many choices can lead to "buyer's remorse," but it can also cause behavioral paralysis, which is when "people are faced with so many choices that they can’t decide among them and make no choice at all."
  • Earlier economic theory suggested that the more choices available, the better because people could just ignore the options they didn't want.
  • However, subsequent research indicates that too many choices can not only negatively impact people's ability to decide, but also decrease satisfaction with their ultimate decision.
  • There are four main factors that contribute to choice overload:
    • Choice-Set Complexity — This factor is not always about the number of options available, but how they are organized and how much information is provided about each option. The more information provided about each option increases the likelihood of choice overload.
    • Decision-Task Difficulty — This factor is related to how difficult it is to make the choice. When a quick decision is required, for instance, the number of options can lead to choice overload.
    • Preference Uncertainty — This factor concerns how much a person already knows about what they want. The more they know about what they want, the less likely they are to experience choice overload. Conversely, if they have no idea what they want, the options are probably going to cause them to feel overwhelmed.
    • Decision Goal — When sifting through options, it matters why the consumer is searching. For example, if they are only gathering information for a future decision, then choice overload is less likely to occur. On the other hand, if they are searching because they have to make a decision, they can become overwhelmed with all the options.
  • According to scientists, the brain actually dislikes choices and studies have shown that people who limit their choices are actually happier.
  • When people are faced with too many options, they often put less thought into their decision. For instance, in a study where people were presented with several types of the same brand of toothpaste, participants showed they would rather choose a brand that had just one option than put effort into choosing from a brand that had multiple options.
  • However, less thought often means less satisfaction. Richard Thaler and Cass Sustein in their book, "Nudge," explain that "If customers opt out of the thought process, pick the default or simply just choose any option, there’s far less chance that they’ll be satisfied with the result."
  • Choice is linked to risk in that when there are other options, people are always afraid they made the wrong decision.
  • Behavioral psychology has shown that "people have a bias toward simplicity, and are predisposed to choose products and experiences that minimize their cognitive load."

SUPPORTING DATA

  • In an experiment with consumers and specialty jam, scientists offered shoppers 24 types of jam and even provided samples.
  • Approximately 3% of shoppers who tried a sample actually purchased a jar.
  • Then, in a second experiment, they only offered six types of jam and while the same number of people sampled the flavors, 30% purchased a jar, resulting in a 10-fold increase in sales by just limiting the choices.
  • A recent Episerver report found that "46% of customers have failed to complete a purchase online due to overwhelming choices."
  • Proctor & Gamble found that offering fewer Head & Shoulder varieties led to a 10% increase in sales.
  • Simplicity is a main driver of customer satisfaction and in fact, "64% of consumers are more likely to recommend a brand because of a simple experience."
  • Moreover, "55% of consumers are willing to pay more for uncomplicated experiences."

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