How choice overload impacts eCommerce

Choice overload is a phenomenon that has been proven in scientific studies. The underlying idea is that when faced with too much choice, people feel overwhelmed and struggle to make a decision, and sometimes don’t make a choice at all. In eCommerce, this effect on consumers impacts conversion rates and post-purchase satisfaction. 

In this article, we will look at the impact of choice overload in eCommerce and some of the ways retailers can help consumers navigate complex product categories to present just the right amount of options so buyers choose the right product for their needs. For example, with a product finder consumers are asked a series of simple questions to narrow down the options based on their input. The result is a much smoother shopping experience with fewer feelings of overwhelm and confusion, greater satisfaction with the products they buy, and fewer returns sent back to retailers.

Let’s first look at the background of choice overload and some of the studies that show why it is an issue for consumers. 

A brief history of choice overload 

The term choice overload goes back as far as 1970 when it was first used by writer and businessman Alvin Toffler in his book, Future Shock which focused on the impact of information and technology, which Toffler termed information overload.

Overchoice or choice overload, choice paralysis, or the paradox of choice are all interchangeable terms that mean the same thing: a cognitive impairment characterized by difficulty making a choice when confronted with several possibilities.

As consumers, we have never had access to so much choice and information. eCommerce shopping sites, review sites, company, and product pages give us an abundance of choices and information about each product category, so its no wonder choice overload is becoming a more well-known phenomenon. 

We generally view choice as a good thing and as something that gives us more freedom, but as Barry Schwartz, professor and author of the 2004 book The Paradox of Choice: Why More Is Less, tells the L.A. Times making decisions takes work. Schwartz says:

“The mere act of thinking about whether you prefer A or B tires you out. So if I give you something else that takes discipline, you can’t do it -- you’ll quit faster.”

When individuals have too many options, one of three things is likely to happen, according to Schwartz: consumers make bad judgments, grow unsatisfied with their choices, or get paralyzed and fail to choose anything at all.

This is backed up by a number of studies on choice overload. One of the original and most cited studies was organized by psychologists Sheena Iyengar and Mark Lepper in 1995. The study alternated giving shoppers a sample of 24 or 6 varieties of gourmet jam. The large selection got more people to stop and try jam but resulted in one-tenth as many sales as the smaller selection. Since the jam study, Iyengar and many other researchers have run experiments to verify the findings. For example, research was conducted to see how many individuals choose to set up a retirement savings plan based on the number of funds available to choose from. According to the study, the more different funds there were to pick from, the fewer individuals decided to set up a retirement savings program.

Helping consumers make better choices 

Until recently, psychologists and business leaders have largely disregarded another effect of choice: more choice demands more time and effort, which may lead to worry, regret, unrealistically high expectations, and self-blame if the choices do not work out.

Consumers begin to feel that somewhere out there in the enormous sea of accessible options, there must be a flawless product. So even when we obtain something decent, we believe there must be something better available. Even if they have made a smart selection, customers may feel that something is still lacking. This increased degree of expectation as a result of having too much choice is one of the reasons why eCommerce businesses experience high returns with customers sending items back for refunds.

Another issue is when consumers need to make a decision but the information they have available to make a choice is poor. Writing in the New York Times journalist Alina Tugend says: 

“I know this from experience. A while back, I spent a great deal of time trying to decide which company should provide our Internet, phone, and television cable service. I was looking at only two alternatives, but the options — cost, length of contract, present and future discounts, quality of service — made the decision inordinately difficult.

This was not only because I wanted to get the best deal, but because the information from the companies was overly complicated and vague. I suspected that both companies were less interested in my welfare than in getting my money — and I didn’t want to be a sucker. This was a problem partly of choice overload — too many options — but also of poor information. Research also shows that an excess of choices often leads us to be less, not more, satisfied once we actually decide. There’s often that nagging feeling we could have done better.”

Guided selling is one of the best ways to help consumers overcome feelings of choice overload, and feelings of regret after buying a product, leading to more satisfaction post-purchase. 

This is because it can guide the buyer through the product category they are interested in, and based on a few simple questions narrow down the product choices based on their input. 

In Dialogtrail this works in a very efficient and intuitive process for the shopper. As an example when shopping for a new tent, which is quite a complex category in terms of size, style, use, weatherproofing needs, ease of assembly, price, and so on. When a consumer is faced with this number of decisions in a product category it is easy to see how the results of the studies mentioned above could become a reality. The buyer struggles to make a choice and makes no choice at all. 

Then consider the alternative. The Dialogtrail product finder asks a few simple multiple-choice questions, for example: 

• How many people do you need to fit in your tent? 
• should the tent be waterproof? 
• How wind resistant should it be? 

For the user, just clicking a few times on multiple-choice questions has suddenly reduced a product selection from hundreds to just a handful, all of which fit their own specific criteria. 

There’s no need to search for a long time or read a lot of product pages to understand the basics of each product. Dialogtrail can nicely present the product information in an educative way while reducing choice overload by asking questions in real-time and skipping over questions that are not relevant for the customer. The shopping experience is much simpler, more enjoyable, and effective with the buyer getting what they need. 

For eCommerce retailers helping users remove choice overload can naturally lead to a higher conversion rate, and importantly fewer returns as buyers find products that fit their needs the first time around. Guided selling can help boost revenue by showing just enough choices to drive sales, reducing the regret associated with seeing too many choices and feeling that they have made a mistake after a purchase. 

About Dialogtrail 

Dialogtrail is a lightweight product finder that can be designed to fit your brand style with no coding required. Products can be uploaded and connected to the software and then automatically update in real-time as you adjust your inventory.

Our guided selling tool enables brands to deliver more personalized shopping experiences, and complete more sales. Find out more about our product finder software or contact us for a product demo today!