Imagine a display with 24 types of jam on it. Various flavours and promises of quality jump at you from every direction. There is so much choice and you simply can’t decide which jam you want! So instead of making the decision, you leave the jam behind. Why?
You would think that the greater the choice, the greater the chance of a sale. 24 types of jam is far superior to 6. As with 24 jars of jam every customer will find something they want. Right?
Psychologists Sheena Iyengar and Mark Lepper debunked the idea that ‘more is more’ with their now famous Jam Study in 2000. While a larger display of jam certainly attracted more people, the pair found that the smaller selection actually resulted in more sales, all thanks to the paradox of choice.
The ‘Paradox of Choice,’ also called ‘Choice Overload,’ shows that greater numbers of options lead to a more daunting shopping experience. Too much choice results in too many disparate options to compare and too many variables to factor in. This simply is not the way the human brain likes to work. We like things to be simple.
In a new study, Kellogg researchers have taken a fresh look at data from many paradox of choice studies and have identified specific occasions where reducing choices for shoppers is most likely to boost sales:
- Complex choices: When people want to make a quick and easy choice
- Difficult choices: When making the right choice matters/selling complex products
- Incomparable choices: When you show options that are difficult to compare
- High effort choices: When your customers are unclear about their preferences
Beating the Paradox
So is the only option to cut back on the number of customer options? Not at all! There are many ways to simplify the choice making process without sacrificing breadth of product. The most basic, and most effective, way is logical sub-categorisation to make each product feel more manageable.
A complex choice can be simplified by catering for “Grab & Go” shoppers for example. The Food To Go area in most super-markets is a great illustration of this, offering a balance between availability and limitation of options. Alternatively, if a choice is more difficult due to a complex product, clearly marking customer needs and offering error insurance on the aisle will help simplify the process and offer peace of mind, making a sale more likely.
There are other times where all the customer needs is any way of making a comparison, however spurious. If a customer is trying to compare two incomparable products then offering hero products, for example, ‘No1 best-selling instant coffee’, ‘Voted best tasting freshly ground’ etc. will minimise the need for a choice at all. This, coincidentally, is how most in-store offers work. This strategy also works for high effort choices, ones where the customers don’t really know what they want. In this case, the customer often just needs ANY reason to buy a product, such as an award or recognised recommendation from a third party, something to separate it from the others.
A solid understanding of how your customers think and shop, and being able to provide for these needs, should be the cornerstone of any retail experience. The easier it is for your customer to buy, the easier it is for you to sell.
When we have run our own research into sub-categorisation and signposting here at SXBL, we have seen up to 45% category growth in some cases. We can help you do the same. If you want to improve category segmentation or are curious to know what makes psychologically good, shopper oriented sub-categorisation then why not get in touch?
Phillip Adcock is the founder and Managing Director of the research agency Shopping Behaviour Xplained Ltd, a shopping research organisation that uses psychological insight to explain and predict how consumers will behave. SBXL operates in seventeen countries for hundreds of clients including Mars, Tesco, and B&Q.