Choices, Choices, Choices… Why too many options can be overwhelming to consumers
If you're anything like me, big menus, department stores, and the grocery store are your worst nightmares! While some consumers get excited to try different brands, ice cream flavors and enjoy a vast menu to choose from at a restaurant, I find all of the options to be overwhelming. For example, I love ice cream, and my friends and I go to an ice cream/Italian ice shop in my town called Ralph’s. Ralph’s has almost any flavor of Italian ice and Ice Cream that you could possibly want at any given time but I always wind up getting the same thing because I freeze when I see their extensive selection. The same thing often happens to other consumers when the market segment has far too many options to choose from.
According to American psychologist Barry Schwartz, two things are bound to happen when a consumer is presented with too many choices within a market segment: 1. Analysis Paralysis; and 2. Buyer’s remorse. Buyers often express frustration when they are looking to achieve a goal when shopping around for a product and they are presented with too many options to sift through that may or may not suit their needs. This causes the buyer to freeze and likely choose a product that does not suit them or worse, choose to buy nothing. The second thing that Schwartz says will happen is they will experience buyer’s remorse, which is when you have made a decision and are left wondering if you made the right decision because one of the other options may have been a better fit. Consumers should be confident in the decisions they are making, especially when making major purchases.
The key to market segmentation according to Roger Kerin is increasing synergies between product lines and avoiding ‘cannibalization,’ which is when a company offers new products or chains that wind up stealing sales and customers from the existing products and chains. He gives an example of ANN INC. and their two stores Ann Taylor and LOFT, which target “successful, relatively affluent, fashion-conscious women” and “value-conscious women who want a casual lifestyle at work and home” respectfully. LOFT wound up taking customers from Ann Taylor and it resulted in the closure of 100 stores from both chains: cannibalization.
To avoid businesses experiencing cannibalization and consumers experiencing analysis paralysis and buyer’s remorse, brands must ensure that they are creating synergies between their products that give consumers just enough choices to feel as though they had options and weren't forced into a purchase, but they can remain confident in the decision that they made without wondering if another option would have been a better fit.
