The Power of Choice: Streamlining Retail to Increase Sales
When it comes to retail, is less really more? The Art of Choosing author and Columbia Business School professor Dr. Sheena Iyengar thinks so.
In an interview with Pulse, the official trade publication of the International SPA Association, she pointed out that too much choice could lead to overload and, in the process, overwhelm consumers. As a result, they avoid buying.
In her “jam experiment,” wherein consumers were given a variety of either six or 24 flavors of jam in a tasting booth inside an upscale supermarket, she discovered that, while consumers are drawn to more choices, they are more likely to buy when presented with fewer options. “The more choices consumers have, the more likely they are to disengage in the choosing process,” says Iyengar.
So, the big question is, how do you create a perception of abundance without overwhelming consumers with too many choices? Iyengar offers two ways to streamline your retail:
According to Iyengar, the more options you have, the more important it is for you to categorize those options in order to reveal how those options are different from one another. “Unlike choice, our brains can handle a lot more categories because categories serve as the markers of differentiation,” she says. In general, she suggests no more than 25 categories, since that’s about how many categories our brains can handle. One trick is to give consumers more categories with fewer choices per category—roughly three to 10. “This not only increases people’s perceptions of variety but [also] their likelihood to purchase and to be satisfied with their purchases,” she says.
To concretize choices is another good way to mitigate choice overload. Use visuals to clearly tell consumers the advantages and disadvantages of using one product over another. Through visualization, you can help consumers make outcomes more real to them. One way to do this is through the use of a shelf talker next to products. “In order for people to make good choices, it’s important that the consequences of each option be concrete and understandable,” she says.
Ultimately, Iyengar says, when streamlining choices, it’s not simply about cutting out products, but ensuring that consumers can tell them apart. According to Iyengar, a good test to find out if consumers can easily tell products apart is by first asking employees to describe the products on the retail floor and differentiate one from the other. “If employees can’t tell them apart, your customers surely won’t be able to.”