Thursday, 17 March 2016

More choice is always a good thing right? Wrong!

As a consumer and marketer I always naturally assumed that more choice was always a good thing. Autonomy and free choice are important to the well being of humans, but could too much choice actually be a bad thing?

I have always been a big fan of the brand Levi’s. Growing up in the early 90’s the classic button fly Levis 501 was my jean of choice. Levis Stratus created the iconic 501 jeans style in the 1890’s, which later became one of the best selling clothing items of all time. Of course back then Levi’s predominantly came in one colour with only a limited number of styles. Fast forward to 2016 you can buy jeans in every colour of the rainbow with a plethora of styles, features and fits. With so many choices to make, the simple decision to purchase a pair of jeans just became a lot more challenging.

Increased choice has its obvious benefits, but there are also some major negative effects that must not be ignored. An almost unlimited number of choice options can lead to what’s known as analysis paralysis. This is a state caused by over-thinking and often occurs when a person is presented with a large number of options. A trip to the supermarket can become overwhelming when products come in such a wide number of varieties. This has serious implications for marketing practice since increased choice can cause paralysis and increased anxiety for customers. This is particularly prevalent for today’s consumers who are continually making choices not just on what they purchase but how they live their lives on a daily basis.

For customers who are able to overcome the paralysis, research has shown that they will in fact be less satisfied with the result of the choice than they would have been with fewer options available. On the face of it, this may seem very strange and illogical that increasing choice could make you less satisfied. Imagine the case of purchasing a pair of Levi’s jeans online and later becoming dissatisfied, given the huge amount of variety on offer. It could be easy to imagine yourself being satisfied with one of the many other options available. Post purchase dissonance is the regret or unease in the mind of the consumer that can occur in such an event. Opportunity costs also subtract from the satisfaction that we get from what we choose, even when it is actually a good choice. Increasing the number of options available to consumers inevitably causes the expectations of customers to also increase.

So how much choice is the right amount? This is almost impossible to answer, but it is a question that all marketers should consider. We have all heard of the expression less is more, although this is not a hard and fast rule that can be applied to every situation it is useful to remember. When P&G went from 20 different types of Head and Shoulders shampoo to 15, they experienced a 10% increase in sales. 
Increasing clearly defined categories can also help consumers to make less stressful decisions. Market research often shows that customers want more choice, but actually this many mean that they want a better choosing experience. Too much choice is not a good thing and should not be ignored.

Robert Brunning
Current student in the Master of Marketing program at the University of Sydney Business School

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