Paradox of Choice in Fashion Ecommerce

How fashion ecommerce sites can use the psychology of choice to create a better, more enjoyable customer experience, and increase sales.

The importance and value of simplicity should be one of our foundational beliefs. In everything you do, you must strive to find the essence and cut out the noise. Unnecessary complexity seldom makes anything better.

Well, that might sound like contradictory to some fashion ecommerce sites. The way to generate more sales revenue is to offer a wider range of products. That way, consumers are more likely to find something that they like. Is that so?

You might be surprised to find out that behavioral psychology actually disputes this idea.

What the scientific literature has to say

There are two terms that you’ll want to acquaint yourself with. They both describe roughly the same idea:

The paradox of choice, and Overchoice (or choice overload).

The idea is that when we are faced with a wide range of choices, it becomes more difficult for us to make a decision, and we fall victim to something called analysis paralysis. A mental destroyer which also consumes most of our time.

The idea has been around since ancient times. In one of Aesop’s fables, The Fox and the Cat, the fox brags that he has “hundreds of ways of escaping” while the cat has “only one”. But when they hear the hounds coming for them, the cat climbs up a tree while “the fox in his confusion was caught up by the hounds.”

The moral? Better one safe way than a hundred on which you cannot reckon. Otherwise, be doomed to be hunt down!

To convince you more, psychologists have investigated the phenomenon as it relates to consumer behavior.

In a famous study published in the year 2000, researchers at Columbia University and Stanford University found that actually, increasing your product range may be counterproductive to increasing sales revenue.

People are more likely to purchase gourmet jams or chocolates or to undertake optional class essay assignments when offered a limited array of 6 choices rather than a more extensive array of 24 or 30 choices. Moreover, participants actually reported greater subsequent satisfaction with their selections and wrote better essays when their original set of options had been limited.

And in 2015, a large meta-analysis that looked at the findings of 99 other studies, researchers at Northwestern University concluded the same thing. When you account for other variables that might reduce or increase decision fatigue, the overall effect of your product range—in and of itself—on overchoice is significant.

So, what does this mean?

More products = more decision fatigue = fewer sales.

In another way of saying is that when people experience choice overload, they will have a second-guess and this will push them to feel unsatisfied with the product they bought. With so many choices on the table, how can you be sure you actually picked the best one?

Increasing the quantity of products that are sold in your ecommerce site decreases the perceived quality and value of each individual product in your store. No, small scale implies high touch and high quality.

Rather than appealing to people’s wallets, your company must appeal to people’s hearts. People pay the price for the things they love and want. Best brands help customers construct their own personal identities. Because of this, the value of their goods and services is much greater.

When you buy a brand, you buy into a set of values. You choose to attach your identity to a certain type of lifestyle. It’s a way to construct your identity, but also to signal that identity to the rest of the world.

The way you display your products influences the way they are perceived. Treat them as though they were expensive works of art, and people will perceive their value to be closer to that of expensive works of art. Perceived value is all about presentation. Especially for first-time buyers who haven’t experienced the quality of your products yet.

How to simplify the buying experience to avoid decision fatigue

The first step is to review your product range and identify which products are your best-sellers, and which ones are not performing well. As per the pareto principle, you might find that about 20% of your products generate 80% of your revenue. Look at your lowest-performing SKUs and get rid of them.

You will probably also realize that you carry a lot of items which are fairly similar to each other. These are inevitably going to complicate the decision-making process for your customers: it’s much easier to choose between two very different things (you either want cake, or you want steak) than it is to choose between two very similar things (do you want this strawberry cake or this barely-different strawberry cake? Which one is better? Who knows!)? Try to minimize the amount of redundancy in your product range.

How to reduce complexity without eliminating any options

It may not always make sense to eliminate options. Sometimes, the brands or the products that you stock may not even allow you to do so.

And if you are trying to position yourself as a premium store (this doesn’t have anything to do having products with crazy prices), there may be another way. Let’s call it “the decision funnel”.

By confronting your customers with just one decision at a time, they will reduce the stress and doubt that they feel. The buying experience into a decision funnel, guiding them through the landscape until all of a sudden, they arrive at a final decision. Magic!

In the decision funnel, you guide customers through one small decision at a time, until they have narrowed down their options to just one:

Does the future of ecommerce lie in solving the paradox of choice? We believe that ecommerce businesses need to change if they want to stay competitive in the market.

The widespread adoption of e-commerce has enabled consumer brands and manufacturers to form direct relationships with consumers. They are able to cut out the middleman and capture the retail margin for themselves.

On the other hand, the opportunity birthed by e-commerce brings a new problem faced by consumers– too much choice. The web makes all the products in the world available, and a wealth of research has shown that whilst we say we want choice, too much of it makes us less happy and results in fewer purchases.

A lot of change will be necessary to adjust to this new landscape, and some of it will be painful. But in the end, it will probably be for the better.

The future of retail is in curation, personalization, and high-pointed service that enables consumers to find the right options and make the right choices which works both for their time and wallet as a bonus. And this is what we are doing in Klicklook to make people’s lives easier and better than ever.