Whether or not consumers enjoy having many product choices has been a question businesses, especially in the e-commerce market, have struggled with. Businesses refer to this as the “paradox of choice” and “choice overload” — the relationship between consumers and the amount of choices they’re presented with. It has been under scrutiny in recent years. Studies from the Harvard Business Review, NPR and Stanford have alluded to a connection between the two in which the less likely a consumer is to be overwhelmed, the more likely they are to build loyalty with a brand or company.
Studies from the Harvard Business Reviewdeveloped a metric for determining the effectiveness of consumer engagement and how that translates into how “sticky” a consumer is (how likely they are to remain loyal to a particular brand, product or company). The metric is a “decision simplicity index” and gauges how easy it is for consumers to navigate and understand information about a company or product, how much a consumer can trust the information they find and the readiness of comparable options. The higher the decision simplicity index, the more effective the brand is at making a consumer connection. The studies concluded that brands ranking in the top quarter of the study were 86 percent more likely to be purchased, 9 percent more likely to be repurchased and 115 percent more likely to be recommended to others.
“The next thing we looked at is in which case were people more likely to buy a jar of jam? Now we see the opposite effect. Of the people who stopped when there were 24, only 3 percent of them actually bought a jar of jam. Of the people who stopped when there were six, well, now we saw that 30 percent of them actually bought a jar of jam.” — Sheena Iyengar, NPR 2017
Sheena Iyengar, in an NPR TED Radio Hour, explored the paradox of choice in an experiment involving different types of jam and consumer choices. The experiment looked at two different scenarios: a display with 24 types of jam and a display with six different types of jam. It took into consideration two different variables: how many people stop at a display and how many people purchase jam. The studies discovered the two variables were inversely related to each other. More people stopped at the displays when there were 24 types of jam (60 percent as compared with 30 percent) but more people bought jam when there were six types of jam (30 percent as compared to six percent). While large amounts of content and information might attract larger audiences and drive more traffic to a company’s e-commerce website, conversion rates lower at a marginal rate because of that. However, Dirxion online catalogs can deliver content in a simple, easy-to-use format that doesn’t overwhelm users, especially when developed around Dirxion’s Minimal UI. The interface was designed with online catalogs in mind, giving an emphasis on the pages and information and eliminating potentially distracting factors.
