How Much Choice Do Consumers Want? - eMarketer
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How Much Choice Do Consumers Want?

It depends on the consumer.

March 10, 2008

Product line extensions. New and improved flavors. Mass customization.

Sometimes it seems like giving consumers choices is what marketing is all about. It's part of why manufacturers and service providers put so much information online for consumers.

Yet researchers at the University of Iowa recently found that people who have only a little information about a product are happier with that product than people who have more information.

"We found that once people commit to buying or consuming something, there's a kind of wishful thinking that happens and they want to like what they've bought," said Dhananjay Nayakankuppam, marketing professor at UI.

eMarketer CEO Geoff Ramsey and several eMarketer analysts weighed in on the idea of giving consumers more or less choices.

Ben Macklin

There is only a certain amount of information and choices a human can absorb. The choices now available to consumers in terms of broadband, voice, TV and mobile services—and their possible bundles—from a host of different providers is completely overwhelming for some.

It is all very well to say that we are now a self-serve consumer-driven market with more information for people to make more informed choices. But if the process of making a choice and the fear of making the wrong choice is greater (in terms of time, effort and emotion) than the difference in value between choices, then an increase in choices does not necessarily equate to an increase in value for the consumer.

Marketers and service providers can play an important role by giving consumers a gentle nudge to help simplify their choices.

Jeffrey Grau

One of the touted benefits of peer recommendations, such as those offered on social shopping sites, is that they help simplify consumer decision making.

The Internet is a rich source of information for learning about products, comparing them and finding where they can be purchased.

All of that consumer research, including peer recommendations, has more of an effect on store sales than Web sales, according to eMarketer analysis of US Department of Commerce data.

US Web-Influenced Retail Store Sales vs. Retail E-Commerce Sales, 2007-2012 (billions)

Lisa Phillips

So if 70% of US automotive shoppers research their purchases online before buying, does that mean 100% of them will be really ticked off within three months of the purchase? Or maybe 50% of them will be ok with what they bought, but 1% will be swayed by the US Ford TV commercials that they really wanted an Edge, not a Nissan Murano?

Realistically, people research products to either make themselves comfortable making a choice or to rationalize their primary choice. Either way they can defend it to their partners, parents, friends and siblings.

John du Pre Gauntt

Choosing among French Onion dip, blue cheese and ranch can induce consumer agony. Paradoxically, excessive choice tends to even out such rude passions in matters of the spirit.

Thomas Jefferson, in his Notes on Virginia, said that "difference of opinion is advantageous in religion. The several sects perform the office of censor morum over each other. Millions of innocent men, women, and children, since the introduction of Christianity, have been burned, tortured, fined, imprisoned; yet we have not advanced one inch toward uniformity.

Geoff Ramsey

The University of Iowa study is simply cognitive dissonance theory.

We always want to be internally consistent. If I research and choose a product, I’m expressing a view about myself. Once I’ve made the purchase, I need to rationalize that choice, in order to stay consistent.

If information gleaned post-purchase contradicts my earlier choice and point-of-view, I experience dissonance, and that doesn't feel good for my poor psyche.

Karin von Abrams

The predicament for today's shoppers is compounded by the world's complexity, and the surfeit of choice, as well as the increasingly fast pace of life, which leaves many people in a state of perceived pressure or stress much of the time.

As a result, the need to make a choice is felt as a burden.

Many of the people who instinctively try to avoid stress may also avoid prolonged research prior to purchase, and are therefore predisposed to accept their choices rather than get angry or disappointed.

Paul Verna

This study is a reminder to content owners and marketers that choice has its costs.

Before the Internet ushered in the current era of niche marketing and long-tail tactics, media companies were much more invested in making decisions about content. Edward R. Murrow and Walter Cronkite never asked their audiences to make programming choices for them.

These days, people expect to pick the winner in American Idol, choose among different endings for a movie and put their iPods on shuffle during long car rides.

But there is still value in empowering an expert field guide to filter out the noise and lead people toward informed choices.

Debra Aho Williamson

A personal story: When I was getting ready for our wedding, I went with my husband to the caterer to choose a wedding cake. The caterer told me, "You can have anything you want, any flavor, any filling, any design." It was too much for me and I had a legendary breakdown right there in the caterer's office (my husband still tells the story, 14 years later).

The next day the caterer called and suggested three options. I chose one and the cake was amazing. Lesson learned: Given a few choices, I felt great and still empowered. Given infinite choice, I was paralyzed and fearful.

David Hallerman

There is a key place for multiple choices, and it goes along with a particular element of advertising.

Most brand marketers create ads to appeal to emotions, to sway and woo through images and not ideas.

However, the same marketers also create a subset of detailed advertising for their products, and these ads tend to run not in mass media (as much as they still exist) but in specialist venues.

Compare the emotion-laden car ads that run on TV with the specifications and details that often appear in car ads in Car & Driver and Motor Trend.

The same target audience that can be convinced by benefit-oriented ads can also be the same audience that wants lots of choices, and is not paralyzed by them.

Learn how online research affects consumer behavior. Read eMarketer's Multi-Channel Retailing report.


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