Ecommerce and the paradox of choice: does excessive choice impact your shoppers, and how can you best help them?
The concept of the paradox of choice dates back almost 20 years: the idea that increasing the range of choice for shoppers eventually has a negative effect on conversion rates and satisfaction. In an age when increasing categories and SKUs is the norm, how does this impact your site? Is asking customers to go and find their needle in your haystack really bad, or is it actually good? Here we highlight several studies and wonder whether, actually, the problem of customers being demotivated by the sheer breadth of choice is only just beginning.
Whether in the form of altogether new product categories (such as Amazon moving into groceries) or in the form of adding another 100 SKUs within a particular product category (pick a retailer of your choice), it seems to be generally accepted that expanding choice for customers is a Good Thing. That is to say: it’s good for the customer and good for the business concerned.
Especially online, where fickle customer behaviour is most easily indulged – your competitors’ stores are but a click away – it makes perfect sense to do everything possible to make sure your hard-won or even paid-for site visitor finds what they were looking for. Category expansion? Good thinking. SKU growth? But of course. On-site search? Absolutely. Filters and facets? Tick.
A search of the literature tends to bear out the idea that choice is good, although it’s worth noting that the words “on balance” should be appended to most statements on the subject. Here we review the studies and decide whether it affects the modern shopper.
In 2000, psychologists Iyengar and Lepper published a study titled When Choice is Demotivating: Can One Desire Too Much of a Good Thing?, the results of which contradicted the popular notion that ‘the more choice, the better’.
Shoppers at a food market saw a display table with 24 varieties of gourmet jam. Anyone who sampled the preserves received a discount coupon for $1 off any purchase. On another day, shoppers saw a similar table, except that only six varieties of jam were displayed.
In the experiment, the large display attracted more interest than the small one, but people who saw the large display were just one-tenth as likely to buy – to convert into customers – as people who saw the small display. Iyengar and Lepper repeated their results in three experimental studies in both field and lab conditions.
In the real world, while marketers assume that the more choices that offer the more likely it is that customers will be able to find what they are looking for, in reality there can be too much choice; and that, when there is, consumers are more likely to buy nothing at all.
The Paradox of Choice
One of the most influential books on the subject is The Paradox of Choice, published in 2004. Author Barry Schwartz and his colleagues conducted studies that confirmed the hypothesis that more choice is not always better – and also concluded that the variety of choice can reduce people’s satisfaction with their decisions, even if they made good ones. Increased choice actually decreased satisfaction with matters “as trivial as ice cream flavours and as significant as jobs”.
He suggested that the relationship between choice and satisfaction appears to be a complicated one. Interestingly (given the developments in ecommerce that have occurred since publication of The Paradox of Choice) he asserted that “more choice requires increased time and effort, leading to anxiety, regret, excessively high expectations, and self-blame if the choices don’t work out”.
Such recognition of the impact of time and effort seems almost prescient given their known impact on the online shopping experience today.
Schwartz also distinguished between objective and subjective outcomes. Accepting that a wider choice increases the likelihood that customers will find what they wanted (a good objective outcome), shoppers may feel overwhelmed and dissatisfied (a less-welcome subjective outcome).
This seems particularly pertinent to anyone seeking to establish a correlation between the customer experience (whether they found and bought what they were looking for and whether they enjoyed the process of doing so) and customer loyalty (their propensity to return in future). As he said: “This dissociation between objective and subjective results creates a significant challenge for retailers and marketers that look to choice as a way to enhance the perceived value of their goods and services.”
But the paradox of choice effect may not exist at all
In 2009, a paper was published entitled What moderates the too-much-choice effect?, which described the authors’ attempts to recreate earlier experiments – including the jam experiment – and had failed to do so, failing also to recreate other, similar experiments. The conclusion of the authors was that the paradox of choice may not exist at all; here is a summary from the Financial Times.
Responding to this later research, The Paradox of Choice author Barry Schwartz conceded that the issue of choice overload does not occur for everyone, or all the time, but did suggest that there was still a balance to find that was of most help to consumers.
Two studies, almost a decade apart, with two completely opposing conclusions!
Supermarkets: rationalise or not?
A 2016 study of supermarkets by Kantar examined whether the idea of whether ‘less is more’ in terms of product range – the exact opposite of range expansion – applied to supermarkets, and whether it would help the traditional supermarkets to retrieve market share from the discounters, with their highly rationalised ranges (typically just one-quarter of the number of SKUs).
Effectively, Kantar conducted a real-world test of the paradox of choice, although it wasn’t described as such.
At first glance, Kantar suggested, the results were “overwhelmingly” in favour of increasing choice: 15% sales growth in categories with an expanded assortment against 7% decline among rationalised ranges. But this masked some significant variations which emerged when looking more closely at individual categories: ceteris paribus, categories with expanded lines grew sales by 4% more than expected, compared to 2% for those that were rationalised. But this was only an average, and range reviews were no guarantee of growth – two in five categories increasing range saw sales decline, with fewer shoppers making a purchase.
Thoughts On… Rationalising your Range – Kantar, 2016.
It’s perhaps surprising to find that we have referred, above, to the majority of the most influential research into the impact on consumers of excessive choice of this century. Yes, other papers have been published; most referring to Iyengar/Lepper, Schwartz or Scheibehenne/Greifeneder/Todd. And in the absence of a killer piece of evidence, it seems that we must find the case as “unproven”.
But perhaps we have such a piece (or pieces) of evidence – modern evidence, from online shopping in 2017.
As an industry, we are faced with numerous awkward (well- known, replicable, measurable) factoids. For example:
- the average page visit lasts a little less than a minute (Nielsen Norman, 2011)
- 55% of visitors spend fewer than 15 seconds on your website (Hubspot, 2014)
- in 2000, the average human attention span was 12 seconds. By 2015 this had fallen to 8 seconds – slightly shorter than that of a goldfish (9 seconds) (Microsoft, 2015)
These and many other stats illustrate that as the number of choices has increased for shoppers (as we accept it has), so has their propensity to become butterflies, finding it impossible to settle anywhere for more than a few seconds (as the analytics and statistics indicate). The correlation is clear enough; the question is whether or not there is evidence of cause/effect.
You know, the problem with the original jam experiment is that all 24 varieties of jam on the large table were visible all at the same time. Yes, some at the front of the table, some at the back, but all visible nonetheless, and all easily skimmed in not very many seconds.
The difference between that table and the visible estate of an ecommerce website is that it’s entirely impossible for a fashion retailer to display all 2,000 shift dress SKUs at one time. And which of its customers – even with all the attributes and facets in the world available – wants to search, filter and still need to scroll through umpteen pages of search results to find the one that they are looking for? Not many at all? Not as many as they would like? You know the stats; you can see very well for yourself how many drop out of the purchase journey on your own site (or how many people get to page 4 of any set of search results).
So whatever the truth was about the paradox of choice back in 2000 or 2004 or 2009, evidence now from the ecommerce world of 2017 suggests that the potential for demotivation of your customers through an excess of choice is very real.
With all the limitations of screen sizes, with the way ecommerce platforms have developed, and with all of the “but this is the way we’ve always done it” thinking… you’re going to need new solutions to help people find stuff and be happy about doing it.
That’s what a FoundIt! Moment feels like.
Think about the last time you found exactly what you were looking for on a website. The journey was fast, easy and simple. All the options were spot on. You were spoilt for choice, not overwhelmed by it…and then Boom! There it was! The thing you were after. So you clicked it bought it, and were off to the races.
Unfortunately, plenty of shopping journeys just aren’t so simple. Customers are overwhelmed with choice and have to click, sort, search, filter and paginate their way through endless reams of products. It’s probably happening on your site like this right now.
FoundIt! is here to make it easier. We’re committed to creating more FoundIt! Moments for retailers and their customers to share in. So we’ve developed ground-breaking software that simplifies the journey, accelerates purchasing and revolutionises the way we think about and deliver a relevant shopping experience, and we’re doing it all with data straight from the customers. After all, who else are we laying out all those links and products for?
Sound interesting? If you want to make shopping easier for your customers and grow headline sales, get in touch with and see how much FoundIt! could add to your business.