System Design

Choice overload in System Design

Since the early aughts, Mass Customization has cemented itself into the modern retail landscape with much success. Over the years we’ve learned some things – most notably, that under certain circumstances throwing heaps of options at our consumers has a surprisingly debilitating effect. Many of you have heard of the Jam Experiment, where Stanford student Sheena Iyengar seemingly proved that the more options a consumer is given, the fewer conversions are made. This study has been replicated all over the world with coffee, pens, gift boxes etc – both off-line and online. The results are generally consistent – except for Germany, which is a whole different blog post. Choice overload seems to be a fact of life and something to consider when creating retail Customizers.

Notable authorities on this subject are Barry Schwartz and the aforementioned Sheena Iyengar. Barry is a Psychology Professor at Swarthmore and wrote the book on choice overload – The Paradox of Choice. One of his bigger ponderances is the question does more choice equal more freedom? Of course we’re socialized to think yes, but Barry says that we are burdened by choice in our modern lives. In fact, too much choice causes paralysis and inaction. This concept is perfectly illustrated by another one of Sheena’s studies where she looked at the records of 800,000 Americans who worked for companies that offered Vanguard retirement plans. Depending on the company, employees had a choice between two plans all the way up to 59. Long story short, the more options an employee had, the lower the percentage of participation. These experiments serve to put a handle on a concept that most of us intuitively understand – an overload of options freezes a certain percentage of people, resulting in avoidance of decisions all together.

So, what’s this about? Why would more choice demotivate us to choose? Well, as your options go up, there seems to be a point at which the effort involved to evaluate each choice becomes overwhelming – and our motivation to participate is sabotaged. “At this point”, writes Barry, “choice no longer liberates, but debilitates. It might even be said to tyrannize.”

You may be tempted to believe that this only applies to important, complicated decisions but let’s do a little thought experiment. Imagine a handbag customizer. There are 5 customizable panels. Front, Back, Sides, Inside, Strap. Simple, no red flags. But now imagine that each panel has 100 color choices. Hmm, I thought I wanted light blue, but which light blue? There are 10 of them. And now imagine that there are 10 fabric types and maybe 50 stylish patches. Dammit, I was stoked about creating a cool bag and all of the sudden I’m overwhelmed and questioning my decisions. If Bagerizer Co. is lucky, I’ll put it off until later and I might actually take the time to review all of those options – at best that’s a delayed conversion – at worst it’s a blown opportunity.

Why not ignore the choices that I’m not interested in? Well, it seems that humans are compelled to pay attention to all options because they desire to make the best possible choices and feel as though they’ve done a good job. They may not even want a patch on their bag but because it’s there, it’s forced on them – clicking through 10 pages of thumbnails, distracted, on a tangent, not buying.

If we’re here to sell units, and we all should be, we must be mindful of the point at which the choices that we offer become superfluous and start to work against us. So, what do we do? How do we make sure that we give our customers what they expect without overloading them? Stay tuned for juicy answers in my next blog post.

Originally written while working at Akavit – used with their permission.

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