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When Less is More

Friday, March 18, 2016
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Takeaways

  • Modern consumers have more choices at their fingertips than ever before—but this might not be the case for long. Although the number of products avail­able has surged over the past several decades, the thrill surrounding infinite options has started to fade. This has led some businesses to scale back what they offer to shorten the decision-making pro­cess for fatigued consumers. Many are skeptical of this strategy. But simplification may be unavoidable in the years ahead. For young Boomers and Xers, more options meant more opportunities to express their values and indepen­dence. Millennials, however, are increasingly aware of the draw­backs associated with too many choices—paving the way for a future where less is in fact more.
  • Careful planning is required to present and cate­gorize products effectively. To avoid confusion, busi­nesses need to break their inventory down into manage­able chunks—particularly big-box retailers with diverse product lines like Amazon and Costco. Items can be separated into categories, such as brand, color, size, or flavor; online, it’s vital to offer robust search and filter functions that allow visitors to bypass irrelevant items. Customers also appreciate information (but not too much) that helps them comparison shop: A good exam­ple is Home Depot’s website, which shows those search­ing for lightbulbs a primer that outlines the differ­ences between LED, CFL, and eco-incandescent bulbs.
  • Customers are open to default or pre-selected options. Default options are often character­ized as paternalistic or overly restrictive. But many customers welcome them. The growing number of workplaces automatically enrolling employees in 401(k) plans have received little pushback—because workers assume their employers are better informed. (Indeed, many Millennials will feel that an employer that doesn’t choose is one that doesn’t care.) The same logic applies to all-inclusive, “curated” packages like tours and cruises that save buyers time and hassle—or health care providers that recommend one course of action for an uncertain patient. In scenarios with high trust and low knowledge, fewer choices can be comforting.
  • Reducing choice has a long-term payoff. Scaling back means trading short-term resistance for future rewards. This move will spark com­plaints from custo­mers who miss their favor­ite option, but deter­mined retailers need to persist in order to achieve their eventual goal of a simpler, more stream­lined brand. One example is Walmart, whose efforts to shrink haven’t gone smoothly: A drastic 2009 overhaul backfired after stores cut all but the best-selling mer­chandise and sales plunged. But the company has re­tooled and is tak­ing another shot at transforming its image: Executives have pledged to use better data to cull items more mindfully.

Need to grab some shuteye? You’re in luck if you’re in one of the cities booked for online mattress startup Casper’s “nap tour,” which invites sleepers to test out the compa­ny’s mattress, sheets, and pillow in a mobile pod. A hit with Millennials, Casper only sells one type of each product—a strategy designed to entice consumers who don’t want to wade through a huge field of complex options. At a time when choices of all sorts are multiplying like weeds, simplicity is becoming a selling point, with more businesses trimming their product lines or otherwise making it easier to compare their wares. But it’s a challenge to convince buyers they’re better off with less—making cutting back a risk that could fall flat just as easily as it could pay off.

Casper’s one-type-fits-all approach contrasts sharply with that of its competitors, whose model numbers can stretch into the hundreds. Such variety has become a hallmark of modern life: Whether it’s deliberating over mattresses, phone plans, snacks, TV shows, or potential dates, the abundance of choice at every turn can be overwhelming. Jeans come button-fly, zip-fly, distressed, straight-leg, boot-cut, flared, low-rise, or stone-washed. Teens are surfing, Facebooking, Instagramming, tweeting, reblogging, and Snapchatting. As of 2014, the average American supermarket carried 42,214 items—nearly five times the amount in 1975. Starbucks offers more than 87,000 beverage blends. Amazon stocks as many clothes as all the products in 250 Walmarts combined.

The expansion of choice is the cumulative result of decades of economic growth alongside social and technological change. Rising affluence has stoked demand for ever-more options. Technological improvements—both in manufacturing and information tech­nology—have made it possible to cheaply produce many different kinds of things on the same assembly line, while also introducing a flood of new gadgets to buy. Thanks to the Internet’s “infinite shelf,” businesses and services are accessible no matter how small or how far (see:“The Little Brands That Could”). Against this backdrop, cultural attitudes have grown more individual­istic: With more choices come elevated expectations that every person can have something unique.

In recent years, however, the un­bridled enthusiasm surrounding choice has cooled. For even the highest-tech manufacturers, more options inevitably mean higher production costs and risk making their brand look unfocused. For consumers, evaluating all these options can feel more like a time-wasting burden than a privilege; the average American makes 70 decisions a day. In The Guard­ian, columnist Stuart Jeffries says what’s happening now evokes visions of The Simpsons’  Monstromart: a mega-supermarket whose slogan is “Where Shopping is a Baffling Ordeal.”

The growing sense of choice fa­tigue is supported by research indi­cating that a blizzard of options isn’t necessarily a good thing. In the widely cited 2004 book The Paradox of Choice, psycholo­gist Barry Schwartz argues that beyond a certain point, “choice no longer liberates, but debilitates.” People are more likely to delay making a decision and ultimately feel less satisfied with their final choice. Schwartz cites an influ­ential study that found shoppers at a high-end grocery store were far more likely to purchase jam after they had visited a sampling booth featuring six choices as opposed to 24, along with later research that pro-duced similar results with chocolate, speed dating, and 401(k) plans.

These considerations are inspiring retailers like Casper to keep it simple to avoid overwhelming customers. And it isn’t just small players pruning: Last year, Walmart reduced its average number of store displays by 15 percent in an effort to tame its sprawling image. British grocery chain Tesco slashed its inventory by 30 percent. Paint­maker Glidden drastically thinned its color palette from 1,000 to 282. Procter & Gamble reduced its range of Head & Shoulders shampoos by nearly half—and ended up seeing a 10 percent bump in sales.

The changes go hand-in-hand with other efforts to make the decision-making process less time-consuming. As part of its revamp, Tesco also introduced a new shopper-friendly store layout that groups typical meal ingredients together. Sites with large inven­tories like Netflix offer recommendations to nudge users along. Meanwhile, several travel companies—from Expedia to Four Seasons Hotels—are promoting high-end bundled vacations that promise big discounts. We’re entering a new moment in which the simplic­ity of limited choice is the hallmark of a cutting-edge brand (think Apple, Tesla, Chipotle, or Google’s homepage) and a clutter of endless choices usually points to a troubled brand (think JC Penney, McDonald’s, or Yahoo’s homepage).

Many retailers, however, remain wary of reducing options for fear of driving away customers. In one CEB study, most shoppers agreed they have “just the right amount of choice,” even as they also admitted it’s more difficult to make purchases today. Compound­ing retailers’ skepticism is the fact that choice overload is highly context-dependent: People who are well-informed about a subject or who don’t consider the decision particularly important aren’t affected. Businesses would rather err on the side of caution—figuring that those uninterested in extra options can just ignore them.

Yet further simplification may be unavoidable in the face of generational change. We’ve come a long way from 40 years ago when choice was a thrilling novelty. In response to a society that had aspired to sameness, young Boomers saw great empowerment in pushing for a bigger range of choices that allowed them to live life on their own terms and express their inner values. Their strong sense of individualism was embraced by Gener­ation Xers, who learned to rely on themselves from an early age and trusted their own judgment over institutions. Xers sought and prioritized individual satisfaction in their personal and professional lives: They signed up for freelance gigs, shopped at supermalls, and witnessed an entrepreneurial explosion of free-agent lifestyles. Like Boomers, Xers came of age equating more choices with more freedom.

Among Millennials, however, unlimited choice is no longer a fresh idea—making them more aware of its downside. Whether deciding between career paths or ice cream flavors, this generation is used to having 25 different options staring them in the face—while social media has greatly amplified the temptation to compare their choices to their friends’. In The New Yorker, Millennial columnist Maria Konnikova writes: “We’re surrounded by great choices to make, great places to be, great things to do—and that’s wonderful. But when we’re made to commit to one, just think of everything that gets away.” It’s the same idea more succinctly expressed as “FOMO”: a term that perfectly captures young people’s ambivalence toward living in a world of excess.

In this environment, it’s easy to see why Casper has taken off among Millennials. More than any other generation, Millennials see scaled-back inventories as a way to make their lives easier, particularly when it comes to high-pressure, big-ticket purchases. Un­limited choice leaves them adrift in a sea of barely distinguishable options—and Casper is here to rescue them from spending three more hours researching the perfect mattress.

 

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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