Paradox of Choice

Customers have never had as much access to product information as customers do now. People can research a car, a book, or shoes online now before they decide to make a purchase, all at the click of a mouse. There are now so many online stores with reviews and websites solely dedicated to reviews that a customer may have trouble even making a decision about which site to use and trust, and at this point the decision of which product to buy still looms in the near distance.

This example would likely be embraced by Barry Schwartz in his podcast about the excessive amount of products customers must decide between. His examples of how an outing to buy a regular pair of jeans turned into a multi-hour ordeal and being bombarded by 65 million choices of home stereo possibilities at just one store bring the topic into light.

Answers to which product will benefit a customer the most do not magically appear, but rather the customer must make the decision, usually in the store, between many products. Obviously the customer will bring some preconceived ideas into the decision like brand name, past experience with the brand, and intended use for the product. These all contribute to the decision making process but other factors such as options available and the almighty price can influence the decision as well. Different customers make decisions in different ways and by different processes and some can handle having millions of options while others simply cannot.

Research by a McCombs Ph.D. student, Jae-Eun Namkoong, which studies decision making and regret, compliments Mr. Schwartz’s segment on regret after a decision is made. In Ms. Namkoong’s studies respondents are given choices on how to get to work and the path taken. If the respondent is later told that the path they chose was the fastest they feel good, while on the other hand if they are told the path they took had heavy traffic and the other option was faster they feel regret. A familiar or routine path can often lead to regret in the study. The Paradox of Choice contains a segment about how customers may try to reduce their risk of regret by choosing a certain familiar brand or option, which is reasonable. The problem occurs when customers are overwhelmed with the 65 million home stereo options described before, and no clear preferable choice exists. Even when bringing in past experience a choice with this many variables can be too much.

I have experienced the paradox of choice in one of the simplest places where low-effort purchases are made: the supermarket. I look at my shopping list and realize I need bread; once I turn into the bread aisle I am greeted by more than fifty brands and types of bread. The same goes with canned soup. Often I just scan the display and find three flavors quickly just to be done. Can anybody be expected to make a solid decision when faced by a wall of over two-hundred red and white Campbell’s soup varieties?

Another example of when I faced the paradox of choice was a few months ago when I opened a savings account at a national bank. There were so many choices at first and so many options, but fortunately the financial meltdown helped narrow down my prospects. When I decided on a bank that seemed as if it would survive into the new decade I was forced to decide between over ten saving plans. I compare what I wanted in a savings account to what Mr. Schwartz wanted in a pair of jeans, just the regular model, but unfortunately this seems to never be an option anymore.