The Paradox of Choice
Of all the topics that wander around in E-Commerce country, one that keeps coming back to me constantly is: reducing complexity, making things simple, getting rid of too many options. Personally, I’m a big fan of curated shopping experiences and I’m testing various services — guess what, me, the fashion noob all of a sudden has a fashion expert sending him all kinds of outfits. (Not sure how this will turn out and whether it will be plain jeans and shirt again — ah well.) A couple of months ago, in a post dedicated to laziness in commerce, I also argued that far more turnover could be generated if merchants addressed the need for easy and intuitive shopping. Last night, then, I came across a video by Barry Schwartz, which I’d like to discuss here briefly. Incidentally, my post and the video share the same title …
First of all, this is the video — and the man in shorts and trainers has an awful lot to say:
Barry Schwartz is an American psychologist who has published a book titled — surprise — The Paradox of Choice in 2004. In this video published in the Ted talk series, he outlines the main arguments of his text. Schwartz begins his presentation by questioning the “dogma” that Western society is built on: freedom is a good thing and, in order to assure freedom to everybody, choice becomes necessary. This is where the trouble begins, because having to decide all the time is something that is not desirable at all.
He gives numerous examples for this, the first of which stem from the area of commerce. Be it a local supermarket or a jeans shop with hundreds of different jeans on display: every time, too many options are available. Schwartz also talks about doctors offering more than one possible treatment to their patients. Rather than making the decision for them, the responsibility is shifted to the patients. What strikes me the most, though, is that the talk was given in July 2005: a world before iPhone/iPad and a time with Facebook and other networks still in its infancy — and even then things seemed to be too complex already!
Paralysis rather than liberation
One negative aspect of all these options is that rather than having a positive effect — people are free to choose whatever they want — too many choices paralyse people. In other words, the more choices one can make, the harder it is to actually make a decision. Eventually, no decision is made at all — paralysis.
Even if a choice can be made, we end up less satisfied with the result
Ironically, even if a choice can be made, it if often the case that we don’t feel really satisfied. All available options mean that we constantly compare our decision to what we could have gotten otherwise, thus making us regret our choice more — even if it was a good one. Or, as Schwartz says, “opportunity costs subtract from the satisfaction we get out of what we choose even if what we choose is terrific”.
Escalation of expectation
With so many variants to choose from — Schwartz gives the example of a jeans shop — the expectations that are generated can never be met by reality. If you have so many options to choose from, supposedly you’re bound to end up with the perfect one — but only in theory. Constantly comparing reality with one’s expectations, then, almost always leads to disappointment. In the world we live in, with all its marketing efforts, expectations are going through the roof, and it becomes harder and harder to be pleasantly surprised.
Who’s to blame, asks Schwartz, if there is only one kind of jeans in the world and it doesn’t fit? The answer: the world. But who’s to blame if there are hundred of jeans on display and the one bought doesn’t fit? The answer: you and me. People think they’re at fault because they cannot make the right decisions and blame themselves.
This is a commerce blog, and I think it’s not hard to see the connection between a psychologist’s insights and consumer behaviour. We live in a commerce world with shitloads of options — ie. products, services and their numerous variants and combinations — that we have to deal with. Arguably, it’s an example of progress that we’re now able to decide between more than a handful of different shoes. However, as Schwartz would have it, some options are better than no options at all, but it doesn’t follow that the more options there are, the more welfare is generated. There is a fine line between just the right amount of choice and overwhelming, even paralysing amounts of options, and I think that hitting exactly that sweet spot will be an increasingly important asset of successful commerce businesses in the future.
First published on ecompunk.com