The paradox of choice in e-commerce

paradox of choice
The paradox of choice

Today we’ll try to answer the question – whether a big choice offered to the client is an advantage or disadvantage.

Let’s start with presenting such an experiment: two groups of clients were offered to taste different kinds of jams. The first group was given 6 kinds of jams, the second 24 kinds. It turned out that 30% of clients from the first group bought later a jar of jam, and only 3% of clients from the second group. Why?

The bigger choice you give to the client, the more difficult decision he has to make. In this case, the easiest solution to the client is to give up making decision (put it off).

The second example. The clients are given different types of offers:

•  Sony CD player at a lower price: 99$ (60$ cheaper) – 66% of people are willing to buy it, 34% of people want to wait.
•  Two different Sony CD players for 99$ and Aiwa CD player (better than Sony) for169 $ (all at a lower price) – 47% want to buy Sony, the rest abstains from buying.
•  Sony CD player for 99$ and Aiwa CD player for 105$ (it has worse parameters than Sony): 73% decide to buy Sony.

In the first case, the client got an attractive offer and 66% of people wanted to benefit from it. However, when we add additional possibility (example number 2), the amount of people who want to buy Sony drops below 50%. The client had to choose between price and quality, so making a choice was difficult for him. However in the third situation, poor quality of Aiwa CD player made people sure that Sony is a good option and here the percentage of people buying Sony was the highest.

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Here are the conclusions we can draw for our sales offer:

•  Too big choice, offered to the client, causes delay in buying decision.
•  Most of the clients are guided by the price while buying something – if you want to promote a product, make sure it’s not the most expensive product in your offer.
•  Don’t promote similar products at the same time – the client may have a problem with making decision.
•  Introduce time-limited special offers (see:The magic of the lost benefits ).

This post was based on the book of Barry Schwartz ‘The paradox of choice’.

Barry Schwartz: The paradox of choice

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