Choice Overload

Have you ever opened Netflix to watch something new and experienced an abundant overload of choices and eventually switched to Youtube or something else?

This phenomenon is called the choice overload effect. An interesting paper written by Iyenger and Lepper called “When choice is demotivating” explains by various real-life experiments about how a consumer is more likely to buy a product when given fewer choices rather than many choices. 

The experiment they conducted is famously called the jam experiment. where On a regular day at a local food market, people would find a display table with 24 different kinds of jams. Then on another day, at that same food market, people were given only 6 different types of jam choices. 

They found that when 24 different types of jams were presented there was surely way more interest in the products as compared to when 6 different jams were presented for tasting. At this point, many readers would believe that a larger choice would’ve definitely gotten more sales compared to the day when there were far fewer choices. But these readers who believed this were wrong! when fewer jams were presented the sales were significantly higher than the day more jams were presented. 

Why? Do consumers really dislike a large variety of choices? 

When presented with a large number of choices the consumers go through a choice paralyzes. A choice paralyzes is when a customer gets demotivated to buy something when presented with many choices and making a quick and easy decision becomes challenging for them. Therefore a large number of choices reduce customer satisfaction. 

The Journal of Consumer Psychology in 2015, analyzed a total of 99 ‘choice studies’ and concentrated on cases in which reducing choices helped to increase sales.

The result of the study was broken down into 4 main criteria that motivate consumers to buy a product, these 4 criteria are:

• People want to make a quick and easy choice
• Fewer alternatives in the market
• When consumers don’t have clear preferences of what they want
• When the product is complex, fewer choices help the consumer make an easier decision.

Presenting a consumer with a choice can be extremely critical, by experimenting and correct market research any retailer or manufacturer can easily increase their sales. For a deeper understanding of Iyenger and Lepper's experiment I highly recommend reading their paper. Please feel free to ask any questions about the paper or for further clarification about this concept.