Does User-Experience Design confirm the Paradox of Choice?
By: Sarba Basu
Tags: UX Design, Psychology, Marketing, Customer Experience

Understanding consumer decisions and the design of experiences to contemplate if choices are good for business.

‘Looking for shoes?’ Try Amazon, they said — after an hour of scrolling up and down, next thing I know I have about a zillion shoes in my wishlist, but exit from the app with zero shoes heading my way. Has this ever happened to you with online shopping? Overwhelmed with the various sub-types and different colors/patterns of the same product which make you discard your actual need for the product in question? If you have, then psychologist Barry Schwartz termed this exact feeling of yours as the paradox of choice. In a nutshell — more choices lead to fewer sales.

Digital experiences aim at making consumer lives easier but it doesn’t seem to be the case. Not very long ago, a consumer report by Smartassistant revealed that 42% of digital shoppers abandoned their transactions because there was too much choice. Is choice paralysis being induced with too many options presented by online retailers?

It all began with Jam!

Almost two decades ago, Sheena Iyenger, a professor at Columbia Business School, performed a consumer study with an experiment using two different jam displays: one with six flavors and the other with 24. The result? Although the table with 24 flavors had a high footfall, the conversion rate was only 4% in comparison to 30% for the counter with fewer options. This experiment set the path for Barry Schwartz to talk extensively about this choice paralysis in his book “Paradox of Choice: Why More is Less”. A large number of options leads to anxiety in users making it counterproductive to the actual underlying objective of providing choices.

So why are there still so many options for the same thing? — Neo-classical economics or love for colors?

Even with this oddity of many choices leading to fewer conversions, e-commerce sites still see a display of 10 different colors of the same product! Why so? The phenomenon of choice overload was shot down by quite a few people. Financial Times journalist Tim Hartford posed the question that if this were to be true, then retailers and food chains like Starbucks wouldn’t offer a plethora of options of basically the same thing. Research scientist, Benjamin Scheibehenne, echoed this point with an empirical twist after conducting around ten experiments to study choice overload and concluded that lots of choices made no significant difference. This is synonymous to the traditional economic theory of consumer behavior where more is always better.

Also, the jam experiment suffers from something called the replication crisis — when tried to repeat the experiment with the exact same parameters, the study did not come up with the same conclusion. That can mean only one thing. (uh-oh, choices are good!)

But then again, in case of online consumer activity, we see conversions happen when there are fewer fields to fill for forms or fewer social sharing buttons. Along with reports of abandoned digital carts, these tilt the scales to the other side. Psychological wisdom implies choices create fatigue in human minds which directly affect consumer decision-making.

But wait, there’s something called Single-Option Aversion as well!

If choices were bad for business, retailers would stock only unique products and brands would eliminate all variants. But, that’s not the case as Daniel Mochon writes about in the Journal of Consumer Research. According to his study, in one experiment, consumers were asked to buy a DVD player, one group had an option of a Sony DVD player, a second group a Phillips one, and the third one had both options. As the notion of single option aversion suggests, the third group made the most purchase.

Conventional Wisdom or Jam Flavors? — and why Choices are not Decisions

So we’re back at the debate, myth or fact? For a consumer, are choices to a product a good thing or bad? A wise man, and marketing guru, Seth Godin shared his wisdom: ‘in a world where we have too many choices, and too little time, the obvious thing to do is just ignore stuff.’ So, when it comes to choice overload, a lot of it lies with the consumer and the underlying purchase decision.

Researchers at Kellogg business school also revealed a few cases which can be called the factors of the overload in question.

What came first? –A Stanford GSB study suggests that every decision can ideally swing two ways. Firstly, if the initial decision is definitely buying the product, then various alternative options would confuse the buyer. However, if the decision about which product to buy isn’t clear, then options might be conducive.

Personal loans or Home loans or Car loans? –Options presented are either not comparable, or inadequate information on each of them, or the mere way of being organized can lead to confusion in the consumer mind.

Is that what I want? — Imagine you want to invest in mutual funds for the very first time, and you have absolutely no idea about them. And you’re shown several fund types (equity, mid-cap, open-ended, index, sectoral to name a few), along with the separate risk associated with each — would you still have clarity on your preference?

It’s the decision that matters–dating sites vs picking ice-cream: Options in Tinder would require time and consideration whereas choosing at Baskin Robbins is something usually done quickly. It’s those comparatively trivial and instantaneous decisions that need fewer options to avoid overload.

In the end, it’s all about Design and the Choice Architecture

Although, with the various studies and experiments done by researchers to counter the paradox over the years, Scheibehenne confers from his meta-analysis that both cases actually hold true. Sometimes choices are good for consumers, and sometimes they aren’t. Coming back to the great Seth Godin again, he is of the opinion that the trick in getting the balance lies in storytelling — it’s the responsibility of the brand or marketer to choose the right story behind each of the choices that they want to present to their customers.

The key to finding the optimum between too many choices (that drive customers away) and no options (that creep customers away) is to find the right way to present those variants so that consumers don’t feel anxiety and are able to make the right choice. And, as Godin infers choices aren’t decisions: the ‘overload’ that businesses need to worry about should be information, not product variants.

The experience, digital or otherwise, needs to be so designed that the consumers enjoy the choices and feels empowered by comparing their selections to the alternatives. The story should include all possible extremes of intended emotions, and the consumer then chooses the one with the most resonance. As Godin observes, marketers have been doing this forever. When David Ogilvy and his team first started making ads in the 1950s, they figured a hole in the market and filled that gap with features — the mantra was all about positioning. Potato chips: healthy organic, crispy, traditional satisfying — emotions that sell.

The question no longer lies in numbers — less is more or more is better. It’s crucial to figure out when to give choices and when not to by understanding the consumer psyche. Brands, marketers, and retailers need to build the arc of the consumer path in a way that guides customers to the path of a definite goal with or without choices.

That’s exactly what I was looking for!: Brands like Amazon, Spotify, and Netflix are doing great when it comes to presenting options. There are close to 15000 titles on Netflix including movies, television shows, and original content. If people sort through that every time on a movie night, nobody would ever get around to watching anything. To avoid overwhelming users with too many choices, personalization is one of the tools brands seem to be adopting. Through product recommendations based on user behavior and preference history, giving the user exactly what they want saves the anxiety of having to look at multiple choices.

Superheroes or Sitcoms?: There can be 5000 T-shirts on an e-commerce site — but browsing through all of them in the hope of a better one would definitely leave users disoriented. Instead, if they were sorted into various categories, customers could just browse through their desired group.

What exactly is that?!: Remember the mutual funds’ example — in most cases, especially for financial services, users get stressed out by technical jargon, and lack proper conceptual understanding. Retailers and brands need to condition their users to complexity. Make their offerings easily comprehensible and then expose customers to options. Simplifying web experiences keeping minimalistic interfaces leads to higher conversions — maybe unique CTAs or fewer social media sharing buttons.

Not too long ago, a report revealed that consumers value honest and personal advice as an important service from retailers and brands. Expert advice on products and brands could mitigate the existing paralysis from choice proliferation.

Looks like choices are here to stay in a consumer’s life. But with a better design in building those choices, a better choosing experience can be crafted.

References:

‘This is Marketing’ by Seth Godin

‘Can There Ever Be Too Many Options? A Meta-Analytic Review of Choice Overload’ by Benjamin Schiebehenne, Rainer Greifeneder, Peter Todd