How “Less is More” when competing with Amazon

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When is too much choice a bad thing? Brain scientists and psychologists have discovered that too many choices overwhelms our brain. Too many choices becomes intimidating, frustrating and can result in fewer sales. Amazon has literally been creating a “store of everything”. Few retailers can afford to compete with the “more” of everything in Amazon’s ecosystem. However, research indicates that retailers can offer customers “more” relevancy and value by narrowing choice through curation. By helping customers narrow choices to what is most relevant, retailers can create a more positive experience and increase sales.

Why this is important: The historical premise of retail was “more is better”. However, science shows that too many choices overwhelms our brain; we get frustrated and cannot decide. Retailers curating choices can achieve more sales.

The Power of Curation – “Less is More” can grow sales

Jeff Stibel is a brain scientist who has studied how increasing choices can cause stress, frustration and even inhibit decisions. According to Stibel, “The brain actually loathes choice, and science tells us that those who limit choices may be on to something.” Obviously, when curating choices for customers there must be relevancy. The question for retailers is whether limiting choices will positively affect sales.

Jeff Stibel cites an interesting case study about something as simple as choosing a jam. Sheena Iyengar and Mark Lepper ran a simple experiment to test the effect the number of jam choices on sales. Here is what they found in their comparative test:

  • Upscale market, 24 types of jams with free samples à 3% who tried a sample purchased
  • Reduced to test to 6 jams with free samples à same number tasted but 30% purchased
  • Sales increased 10X by offering only 25% of total sample à less = more sales

Stibel’s concludes that it is hard to be sure about the right choice when there are literally too many options on the table. These results are particularly salient in the age of Amazon where there are now millions of choices online. Retailers can strategically leverage these insights to create “less is more” curation strategies to increase customer satisfaction and grow sales.

The concept of “too much choice” is not a new construct. Barry Schwatz published The Paradox of Choice in 2004. The paradox is that as consumers face an increasing abundance of choice, they grow more frustrated, more anxious about making decisions and less likely to choose. In the words of Barry Schwartz:

“We can imagine a point at which the options would be so copious that even the world’s most ardent supporters of freedom of choice would begin to say enough already.”

We have reached “enough already”! My recent search for “smarthome light bulbs” on Amazon yielded over 5,000 product choices! We as consumers cannot begin to read all of the descriptions, specs and customer reviews. The danger for every retailer, even Amazon, is that we become frustrated, fear that we will make the wrong choice, and we abandon our cart.

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Ways retailers can leverage “The Paradox of Choice” to increase sales

Other than the largest of retailers (aka Walmart), few retailers have the infrastructure, talent or resources to compete with Amazon. They simply cannot beat Amazon on assortment depth, breadth or delivery. Essentially, Amazon has become the “distribution agent” for suppliers worldwide. They are the ultimate “everything store, with the ecosystem to deliver everywhere.

To compete, retailers must differentiate and become relevant in other ways. Instead of focusing on showing and stocking more, retailers must focus on helping customers by limiting choice and helping them decide what will work for them. To capitalize on “less is more” requires increased focus and leveraging curation at a number of levels, in a number of ways.

  1. Curating assortments

    One could argue that physical retailers have always curated assortments to fit the store. However, the research on the ability to increase sales by focusing on a limited range of choices highlights how strategic curation becomes even more critical today. Curated assortments need to be validated by customer trends and purchase patterns.

    All choice options for both physical and digital retail need to be constantly tested. Less is only more if curation improves customer experience, increases conversion rates and grows sales.

    In addition to the products selected, retailers need to evaluate the presentation of choice options online and in store. There is both an art and science of how to arrange options to highlight key differences in ways that make it easier for customers to decide.

  2. Curating knowledge

    Putting more “stuff” and details on the product packaging or web product page does NOT make it better. More photos does not make it better. Customers want essentials. What they respond to and use is very trackable and testable.

    Retailers need to provide more than specifications. The best way to help customers decide is to curate rich content, which illustrates how a product is by customers in their daily life. Amazon also fully understands the power of curating relevant knowledge in the form of customer reviews and Q&A focused on application and decision criteria.

  3. Curating talent

    Consumer anxiety and frustration over too many choices creates an opportunity for store talent and investing in training. This means more than putting “bodies on the floor”. It requires more than training staff on product knowledge.

    Apple is the epitome of less is more in stores. Their stores are clean, uncluttered and focused on customer experience. However, the real differentiator is that they select talent who can engage customers, and they train the staff on how to ask questions that will help customers decide to buy what is best for them. One of our blogs highlights the “ASK” model can effectively increase customer satisfaction and sales.


The Retail Paradox of Choice – Apocalypse or Reinvention?

In the words of Jeff Bezos: “Failure is not that expensive”. The big fail of failing retailers is the being overwhelmed, frustrated and not making timely decisions on what to test. They are not failing fast enough to see what works for them. Testing curation strategies based on “less is more” is a no brainer … and a cost effective imperative for most.

Sources:

MorningNewsBeat: How Too Many Choices Can Jam You Up, Kevin Coupe; August 2, 2018

USA Today: Mind blown? Yes there is proof that too much choice overwhelms your brain, Jeff Stibel; July 31, 2018

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