As a retailer, a sense of pride comes with seeing a fully stocked shelf with oodles of varieties in the same product category. After all, the more choices shoppers have, the happier they are, right?
As it turns out, more isn’t always better. A new study says “choice overload” may not only force customers to make bad decisions, but it can also cause a feeling of paralyzing uncertainty and overall dissatisfaction with the shopping experience. Not exactly what you had in mind for those customers in Aisle 2.
The study, “Does Choice Mean Freedom and Well-being?”, co-authored by Barry Schwartz and Hazel Rose Markus, professors at Pennsylvania’s Swarthmore College and California’s Stanford University, respectively, looks at how an abundance of choice in styles, flavours and colours influences consumer behaviour.
In grocery stores, there are three major effects, says Schwartz. One is that choice paralyzes shoppers into not choosing. So they walk out of the store empty-handed or with fewer items than they’d otherwise purchase. “When it comes to the necessities they obviously pull the trigger,” says Schwartz, “but when it comes to things that are discretionary, nothing compels them and they are confused–maybe even a little angry.”
Today it’s more about giving the customer the right choices and retailers asking themselves, ‘What is my customer really looking for’ then getting rid of superfluous choices that just make shopping a more challenging experience.
Excess choice also causes bad decision-making. For instance, if the choice of what to purchase has any complexity–if there are multiple things to consider such as price, nutritional value, convenience and name brand, and each has many dimensions–shoppers simply have too hard a time deciding. “So what they do is simplify. For instance, they’ll decide to always buy Nabisco,” says Schwartz. “That’s great if you happen to be Nabisco, but not so great if you’re not.”
The third issue, says Schwartz, is that even when consumers make good decisions they feel less confident about them because they compare what they chose to all the items they rejected. It’s a no-win situation because it’s impossible for any one product to be the best in every way. “Every attractive thing they look at subtracts from the satisfaction they get from whichever one they actually choose,” says Schwartz. “So they bring it home and feel kind of disappointed.”
Adding to that disappointment is the stress tethered to choice overload. Patrick Rodmell, president of retail consulting firm Watt International in Toronto, says, “It used to be that people thought it was positive, but now ‘choice’ can become a stress word.” He thinks the era of stores that carry unlimited choices for consumers is ending. “Today it’s more about giving the customer the right choices and retailers asking themselves, ‘What is my customer really looking for?’ then getting rid of superfluous choices that just make shopping a more challenging experience.”
It may feel counterintuitive, but reducing SKU counts can be a good thing. Start by reviewing each category’s sales data and space allocation. “If you look at a shelf and say, ‘Can I get rid of one in 10 products?’ you’ll be amazed at how the shelf is easier to shop if there’s one more facing of products and one or two choices taken out,” says Rodmell.
Schwartz summarizes his own advice for retailers: “Stop torturing people.” When it comes to giving shoppers choice, less is more.