As you stroll through the crowded, festive streets illuminated with a thousand colors, your attention as food enthusiasts is caught by two stands on either side of the street.
Both sell artisanal jams: on one counter there are 24 variants; on the other counter there are only 6 variants.
Which of the two stands is more likely to pique your interest?
Which of the two stands is more likely to turn you into their customers?
The answers to these two questions may not coincide.
Too much choice leads to no choice
In 2000, psychologists Sheena Iyengar and Mark Lepper conducted an experiment to check the correlation between the number of alternatives available and the customer conversion rate.
The experiment didn't take place in Christmas markets but in Menlo Park, California, in an upscale supermarket, where potential customers were lured with a $1 discount voucher.
The results seem counterintuitive:
- The counter with 24 gourmet jams attracted 60% of customers but achieved a conversion rate of 3%
- The counter with 6 gourmet jams attracted 40% of customers but achieved a conversion rate of 30%
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Pitfalls for our decision-making process
It's an apparent paradox: an excessively broad range of alternatives puts our decision-making process in crisis, making it costly in terms of time and energy.
If people think it's not worth it, many give up and prefer not to make any choice.
If, on the other hand, the range of alternatives is reasonable, we are comfortable because we can make a thoughtful choice that we won't regret.
The probability of making a choice (in this case, a purchase decision) increases when the probability of getting stuck in the decision-making process decreases.
The Paradox of Choice in action
In 2004, a successful book brought the phenomenon into the spotlight, finally giving it a name—without a label, it's hard to conceptualize a new idea: Barry Schwartz's The Paradox of Choice.
In addition to cognitive overload, at the heart of the paradox of choice is the opportunity cost of missed choices: more choices, more frustration with what we must discard.
Choosing one jam out of 6 means giving up 5 possible alternatives; choosing one jam out of 24 means giving up 23 possible alternatives, feeding our FOMO - fear of missing out.
Moreover, excess alternatives produce another consequence, perhaps more subtle: having too many choices could lead us to seek the optimal choice, fueling exaggerated expectations and the risk of disappointment.
Choice overload or information overload?
Subsequent research, however, suggests that the problem may not be too much choice but rather too much information (its extent and complexity).
The paradox of choice is influenced not only by the sheer number of alternatives but also by other factors:
- The intrinsic difficulty of the decision-making task
- The complexity of the choice set (some sets of options are less easy to compare or particularly rich in information to process)
- The level of uncertainty of the chooser (some are less informed, less skilled in evaluation, or have less clear preferences)
- The goal of the chooser (some are satisfied with a good solution; others demand the optimal one)
The paradox of choice, therefore, would mitigate its effects when the chooser is more informed and aware, and when choices are presented in a clear, orderly, rational manner.
And this is where we, the communication professionals, come into play.
Casper and the choice of the right mattress
Casper's mattress offer focuses on only 8 products, organized into 3 easy-to-understand categories: Value – Performance – Cooling.
Moreover, an online tool allows comparing 3 mattresses at a time, facilitating an informed decision.
Finally, to help us find the right mattress, there's the mattress quiz, the result of which will be sent by email.
So, the company achieves two goals with one stone: providing guidance to the prospect and obtaining their email address to establish a long-term relationship.
The drastic cut on Tesco's shelves
A cartoon from the Covid era (look at the masks!) ironically illustrates the euphoria in front of the variety of products on the supermarket shelves, but also the confusion generated by the many useless options.
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| Cartoon from here |
A few years ago, indeed, Tesco, the main supermarket chain in the UK, reduced the products on its shelves by about 30%.
Previously, Tesco offered 90,000 different products: what was the point of such a wide range when the average family bought 41 products a week and 400 a year?
Direct competitors like Morrisons, Asda, and Sainsbury’s offered between 20,000 and 30,000 different products; discounters like Aldi and Lidl around 2,000.
Reducing the variety of products simplified the customer's purchasing process but also the sourcing of goods, reducing organizational and procurement costs and final prices.
Stitch Fix's custom wardrobe
Another response to choice overload is personalization, which takes away the burden of choice from customers by providing tailor-made solutions based on their behaviors.
Choosing what to wear, for example, is not easy.
Stitch Fix comes to our aid by inviting us to fill out their style quiz, so as to understand our tastes, size, and budget.
After that, the ball passes to one of their stylists, who will provide us with a selection of 5 pieces of clothing.
The tool is far from anonymous or impersonal: it's a real-life stylist advising us.
Spotify's Weekly Mixtape
Spotify needs no introduction: over 100 million tracks, 5 million podcasts, and 350,000 audiobooks.
Too many not to risk getting lost.
That's why the streaming service introduced Discover Weekly: every Monday, users are provided with a unique and personalized mixtape, with always new music and deep cuts picked for you.
Otherwise, each user would risk limiting themselves to what they already know; and emerging talents would have less chance of succeeding.
Sources
Academic research
Web articles
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