Is Choice Overload a Problem in the Digital Age?
The term choice overload (or overchoice) was coined in 1970 by Alvin Toffler in his novel Future Shock. Skip a few years ahead and you’ll find that in 2000, researchers at Stanford and Columbia Universities discovered the conventional wisdom of the time was wrong. More is not better. It turned out that marketers’ decision to bombard consumers with more and more product choices just put a cognitive burden on consumers, resulting in bad or no choices at all.
One of the first experiments to illustrate the choice overload problem involved exposing store customers to various exotic jam samples – 24 samples and 6 samples. Researchers found that customers were more likely to buy the jam when exposed to the 6-sample batch as opposed to the 24-sample batch (30% vs. 3%). According to Sheen Iyengan, psycho-economist and one of the researchers: “We choose not to choose even when it goes against our self-interest.” The research and experiments showed that more choices presented results in less participation. Choice overload reduces engagement, decision quality and ultimately satisfaction.
Choice overload becomes a problem when the customer is under a time constraint, when the customer either has to choose between highly or slightly differentiated products, when the product presentation is chaotic, when all choices seem equally attractive, when all the products have equally complimentary features, when the customer is uncertain about their preferences, and when it results in a cognitive burden.
Concerning retailers, “What we’re seeing more and more is that if you are willing to cut, get rid of those extraneous redundant options, well there’s an increase in sales, there’s a lowering of costs, there’s an improvement of the choosing experience” says Iyengan. Another way of addressing the choice overload problem is 'concretization'. People must be able to vividly realize or see the consequence or result of their choice. Additionally, a way to handle the problem is through categorization. People are better at handling a large number of categories. Finally, are 'conditions of complexity'. This means the customers are more likely to choose when presented with simple choices first and complex choices last.
Is Choice Overload Even a Real Problem?
More recent studies have shown that with a large sample group in multiple experiments, the amount of participants who had a choice overload problem was negligible. A 2010 meta-analysis, by Scheibehenne eta al., of 30 papers on the choice overload problem showed that, on the contrary, ‘more is worse’ was found to be a minuscule problem in each analysed experiment. The papers collectively contained 50 experiments with a total of 5036 participants.
A 2013 reanalysis, by Gabriel E. Gonzales of Pennsylvania State University, of the 2010 meta-analysis showed a different story. Gonzales added variables to the initial 2010 data, taking into account how the studies’ conditions were manipulated to meet the particular hypothesis: the product prices and long-term customer satisfaction. His result showed that choice overload might be a problem after all. He attributed a large issue with choice overload to information overload – giving participants complex and large amounts of information to consume needed to make their choice.
The problem with discovering whether the choice overload problem is real is that there are too many conflicting studies. Moreover, these studies are difficult to compare as each uses different protocols to reach a result. That is that each is designed differently and have different conditions to elicit a response. The scientific method requires third parties to replicate existing studies to see if the result stays the same. Therefore, the validity of a study’s outcome is largely dependent on the results of replicated studies. Moreover, studies showing there is no choice overload problem often go unpublished.
So the answer is, yes and no. There are conflicting studies that cannot be sufficiently be compared, the conditions that participants are under influence the results (amount of products, price and preference) and studies showing a negative correlation to the choice overload problem often go unpublished. What is becoming more relevant to the choice overload problem today is whether or not it is a problem in the digital age.
The large majority of choice overload studies occur in traditional shopping environments (malls and grocery shops) or in a lab setting. In these settings, when searching for the desired product, there is a high cost of mental activities (such as referring to external sources and long-term memory) and people often choose a satisfactory product instead of a long search for the optimal product.
First some facts about online shopping:
- Online shoppers in the US are predicted to increase to 91% of the population by 2023.
- 48% of online shoppers buy on impulse.
- Before buying, 60% of shoppers look at online reviews.
- 71% of shoppers believe they will get a better deal online than in stores.
These statistics are important to address the possible online choice overload problem. It shows that if there is an online choice overload problem then online retailers need to consider how to present their products and how many products to make available. Below are the conclusions of various diverse studies.
Overchoice is a myth:
- It was found that shopping online dramatically decreases cognitive strain in decision making.
- Email click-through rates increase as choices increase. This is because clicking leads to more information.
- Increasing choices positively affects online purchases up to a point.
- Less choice results in low purchase rates.
Overchoice is a problem:
- Customers become overwhelmed when too many images are displayed.
- Customers become overwhelmed when presented with a large variety of products.
- Technology anxiety plays a role in the online choice overload problem.
Again, results are a mixed bag. No clear answer means that it's up to the seller to know their target market.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
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© 2020 Chante van Biljon