Variety: The spice of life. Or is it?

By Aaron K
May 4, 2010
People like to be given a choice. The desire to exercise one’s own free will and proclivity to act in one’s own interests might just be the last part of our consciousness that’s keeping us away from The Matrix, 1984, Brave New World, or whatever your favorite dystopian story is. But is there such a thing as “too many choices?” Sheena Iyengar, behavioral psychologist and choice expert, studies how people make decisions precisely to answer this question. And her research has revealed some startling implications!

A recent New York Times article highlighted Iyengar’s fascinating research in a review of her new book The Art of Choosing. Iyengar, a Stanford grad, has been in the field of social psychology and decision theory for almost 15 years. Her most famous project: a jelly tasting.
In the mid-1990s, Iyengar and a team of psychologists conducted a study outside a small market in Menlo Park, CA. Her focal question: are more options always more desirable when we are faced with a decision? Or, are consumers overwhelmed by the prospect of too many choices? Her statistically supported answer: Less is more.
Iyengar and her team set up two small tasting booths outside the store. The first booth had six different flavors of jam. The second table had 24. And while the latter table attracted significantly more visitors, the table with six jams made more money from purchases. Iyengar noticed that subjects were far more likely to purchase from the table with less variety. In fact, 30 percent of those who stopped at the six-variety stand bought a jar, whereas only 3 percent made purchases from the 24- flavor table.
The report, When Choice is Demotivating: Can One Desire Too Much of a Good Thing?, raised interesting questions into the psychological aspects of human choice and market research: “Having unlimited options, then, can lead people to be more dissatisfied with the choices they make. Such a finding may seem counterintuitive to social psychologists long schooled in research on the benefits of choice.”
Not only did Iyengar recognize that prevailing methodologies in market research and branding were years behind psychology’s understanding of the way humans make choices, but companies could actually be hurting their business by streamlining their products into endless iterations of variety and flavor.
Iyengar’s work and subsequent studies (see The Mere Categorization Effect: How the Presence of Categories Increases Choosers’ Perceptions of Assortment Variety and Outcome Satisfaction) suggest three important conclusions that have ramifications for any B2C organization offering more than one product. The first is that a consumer’s desire to purchase a product can be undermined by an extensive variety of options. Barry Schwartz, a professor of social theory at Swarthmore, calls it “the tyranny of choice.”

Choice Overload

The second important conclusion from Iyengar’s work is that choice is not a bad thing; a lack of available options or alternatives can also (paradoxically) impede an individual from making a decision. For instance, if you were hungry and walked into a sandwich place, what would your response be if you found out they only offered one type of sandwich? If it was good, you may go back there, but only when you were specifically in the mood for their tuna melt. If it was bad, you’d never go back there again. There’d be no reason. And who wants to eat a bad tuna melt?
The third conclusion is a perfect syllogism of the previous two: consumers need a balance between two few options and too many options. When making a decision, a consumer needs to know that he’s not being coerced into choosing a specific product (or brand), but also needs to be able to sort through the data in front of him without becoming too frustrated. Of course, this optimal number – between too many and too few – changes depending on the type of product and its cost, but that doesn’t mean that these numbers are totally subjective.
In a world where we are bombarded with advertisements, branding, and salespeople, it’s easy to fall into a state of analysis paralysis trying to sift through everything. In a globalized market, especially with the nascent connectivity of Internet, that’s the double-edged sword of manufacturing; variety, a tool for expanding a market and recruiting new customers, it would appear, may come at the cost of losing customers overwhelmed by that same variety. If you ask Barry Schwartz, an author who’s written extensively on this subject, he’d call it one big decision-paradox.

If there’s anything self-aware consumers can learn from Iyengar and her work, it’s that we are psychologically attracted to making choices, but this mechanism is constantly working and easily overloaded. Choice is our vertigo in that sense, and an optimal choice set for a product category is the only hand-railing saving us from a deadly fall. Too many choices and we tumble off the ledge; not enough choices and we won’t even step up to the plate to take a swing.
Our will-o’-the-wisp, thus, is finding balance and moderation amidst the chaotic cavalcade of choices intrinsic to any free market. Petronius, the great Roman satirist and the author of Satyricon, once pointedly declared in a Roman court: “Moderation in all things… including moderation!” Did the poet know that 2000 years later we’d be using his social satire as market research? Does Iyengar’s theory prove the age-old adage that “less is more”? Time and dollars will surely tell.
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