Reprint: F0606C
Offering customers too many product choices may decrease their sense of well-being.
Marketers assume that the more choices they offer, the more likely customers will be able to find just the right thing. They assume, for instance, that offering 50 styles of jeans instead of two increases the chances that shoppers will find a pair they really like. Nevertheless, research now shows that there can be too much choice; when there is, consumers are less likely to buy anything at all, and if they do buy, they are less satisfied with their selection.
It all began with jam. In 2000, psychologists Sheena Iyengar and Mark Lepper published a remarkable study. On one day, shoppers at an upscale food market saw a display table with 24 varieties of gourmet jam. Those who sampled the spreads received a coupon for $1 off any jam. On another day, shoppers saw a similar table, except that only six varieties of the jam were on display. The large display attracted more interest than the small one. But when the time came to purchase, people who saw the large display were one-tenth as likely to buy as people who saw the small display.
Other studies have confirmed this result that more choice is not always better. As the variety of snacks, soft drinks, and beers offered at convenience stores increases, for instance, sales volume and customer satisfaction decrease. Moreover, as the number of retirement investment options available to employees increases, the chance that they will choose any decreases. These studies and others have shown not only that excessive choice can produce “choice paralysis,” but also that it can reduce people’s satisfaction with their decisions, even if they made good ones. My colleagues and I have found that increased choice decreases satisfaction with matters as trivial as ice cream flavors and as significant as jobs.
These results challenge what we think we know about human nature and the determinants of well-being. Both psychology and business have operated on the assumption that the relationship between choice and well-being is straightforward: The more choices people have, the better off they are. In psychology, the benefits of choice have been tied to autonomy and control. In business, the benefits of choice have been tied to the benefits of free markets more generally. Added options make no one worse off, and they are bound to make someone better off.
Choice is good for us, but its relationship to satisfaction appears to be more complicated than we had assumed. There is diminishing marginal utility in having alternatives; each new option subtracts a little from the feeling of well-being, until the marginal benefits of added choice level off. What’s more, psychologists and business academics alike have largely ignored another outcome of choice: More of it requires increased time and effort and can lead to anxiety, regret, excessively high expectations, and self-blame if the choices don’t work out. When the number of available options is small, these costs are negligible, but the costs grow with the number of options. Eventually, each new option makes us feel worse off than we did before.
Without a doubt, having more options enables us, most of the time, to achieve better objective outcomes. Again, having 50 styles of jeans as opposed to two increases the likelihood that customers will find a pair that fits. But the subjective outcome may be that shoppers will feel overwhelmed and dissatisfied. 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.
Choice can no longer be used to justify a marketing strategy in and of itself. More isn’t always better, either for the customer or for the retailer. Discovering how much assortment is warranted is a considerable empirical challenge. But companies that get the balance right will be amply rewarded.
