Scroll through the promotions in your inbox. Go ahead, we’ll wait.
What’s clear from the number of marketing emails we get daily is that consumers today are inundated with options. This goes beyond the sheer number of emails, too.
Look at a single marketing email from a clothing retailer. It could feature three shirts, each in five different colors. There could be multiple prices and coupons offered for a wide array of products. And that’s all within the same brand! Zoom out further and you’re looking at a never-ending list of clothing brands to choose from.
The age-old question, however, is whether or not too many options is a good thing from a customer experience perspective. The answer? It depends. Customer intent plays a large role in determining whether more or fewer options leads to a purchase.
I Don’t Think You’re Ready for this… Jam Study
What does having too many choices do to a customer’s ability to make a decision? A famous experiment, known as the Jam Study, was conducted in 2000 by Columbia University’s Sheena Iyengar and Stanford University’s Mark Lepper. In this experiment, customers in a grocery store either saw a table of 24 jams or a table of 6 jams. The goal was to understand how a wide or limited selection impacted the purchase outcome.
As it turns out, while 60% of customers stopped at the table with the wide selection, only 3% of these customers actually purchased. In contrast, while 40% of customers stopped at the table with the limited selection, 30% of those customers made a purchase.
Iyengar and Lepper were able to draw the conclusion that less is actually more. Consumers would rather have fewer options when debating a purchase decision. But does this still ring true 21 years later? How does the number of choices offered today impact the customer experience?
A New Spin on the Jam Study
More recently, a new study has emerged from Stanford University. In 2016, Stanford Professor Itamar Simonson challenged the idea that too many options is a bad thing. Simonson looked into the customer’s mindset as they went into the decision-making process.
Simonson, along with Leilei Gao, Associate Professor at the Chinese University of Hong Kong, looked into two ways the customer could be thinking going into their shopping experience. The first is whether or not the customer was going to buy anything and, second, which product they were going to buy. The key to how a customer would purchase when faced with options was in which of these two decisions came first.
According to Simonson, “If your first decision is about whether you want to buy, then having more options is conducive to buying. But if your first decision is on which specific product to select, then having a big assortment can make it more difficult to identify the best option.”
Let’s look at a real life application: picture yourself in a grocery store. You’re hungry but you’re not sure what you want to eat (we’ve all been there). As you wander the aisles you’ll likely find something that you’re in the mood for and end up buying it. On the other hand, however, if you go to the store knowing that you want a bag of chips and the chip aisle continues for miles, you may get exhausted with the options, realize you’re wasting time trying to choose a brand and leave without making a purchase.
How Can this Help Marketers?
This new study validates the notion that understanding your customers’ intentions is crucial when delivering marketing messages. If your customer is unsure about purchasing, offer a lot of options to demonstrate the variety of products you carry. If your customer has been looking for something specific, offer them a small amount of options in that category, to help them make a decision.
Give Your Customer What They Want
“This is all fine and dandy,” you’re thinking, “but how do I know what my customer wants?” That’s where you have to get creative. If you don’t know your customers on a granular, individual level, you’re missing the mark. Customers know you have access to data and from that, expect tailored messaging that will assist them in making a purchase decision, not just a flood of generic offers. The trick is understanding how to interpret the data you collect to inform your marketing efforts.
Let’s look at another example: this time, you’re an apparel retailer. Through centralized data management, you notice that there is a customer who has been adding sneakers to their cart via both the mobile app and the desktop site. They haven’t purchased a pair yet, but it’s clear that they’re making a decision on which brand to buy. To help guide them, a triggered abandoned cart email could be sent that has information on what to look for when buying the right sneaker. The email could also have two or three recommendations, based on what the customer has in their cart. Fewer options, in this case, benefits the customer.
Customer Experience is Not Always About Gadgets and Gizmos Aplenty
This research by no means dictates that customers who know what they want will always prefer less options and customers who aren’t sure what they’re going to buy always want every option under the sun. These findings should be treated as guides, not rules, because each shopper needs to be treated as an individual.
Herein lies the beauty of today’s marketing technology capabilities. With data you can actually get to know each customer individually to test how they prefer to receive marketing messages. Having the right martech stack to collect customer data is the first step. What that data tells you about how each of your customers shops is where the personalization happens.
To learn more about how you can improve your customer experience, modernize your martech stack and stay ahead of the digital transformation curve, take our digital transformation assessment.