Our previous post on how to create an environment for consumers to make effective, efficient and enjoyable choices was a big hit with our readers. So, we decided to further expand on the topic and use one of the comments we received as a starting point:
Dear MMC team,
Thanks for the post on choice – it really resonated with my personal experience.
About 10 months ago I finally gave in to my woodworking hobby after about 5 years of resisting it. To set up my workshop I needed to shop for tools – power woodworking tools for that matter. Locally it is not easy to get decent woodworking tools and when you get them they are too expensive. So, I needed to look outside Kenya. I chose Europe because quite a good number of the best woodworking brands are European. A friend of mine has in the past shipped staff from the UK so he agreed to help me ship my tools to Kenya. I chose to shop on Amazon.
And that is exactly when my trouble started!!
First, it is worth mentioning at this point that I had never done any woodwork before so I did not have the slightest clue what I wanted. Secondly, I do not know many carpenters who use power tools so the only sources of information on what to buy were YouTube reviews mostly done by the brands themselves and other online platforms which I did not trust. Not much help there!
I almost gave up on the shopping because Amazon is Amazon – the variety is just too much. At this point I was worried about a number of things. I was worried about buying the wrong tool, I was worried about missing out on a deal and I was worried about not adding just a few more dollars to get way superior features. It took me 3 full months of filling and emptying my cart!! I was so tired of the whole process I almost dropped my woodworking ambition. At last I made the decision to just buy! I spent a total of about $3500
There was however one thing I did not buy – a router table. On this one I could not make the decision. There was like 20 brands each claiming to be better than everyone else. Some were cheaper and others expensive, some were more versatile than others but remember I had no clue what I was looking for – I knew what I wanted it to do for me but I could not pick from the variety. I had a budget of $350 for that item but I just could not make the decision!
Reading your article now makes me know that one of these brands lost a sale because of me having too much choice. And I agree, too much choice does not necessarily mean more – for me it meant less because I was not able to make up my mind.
I have since reallocated that budget.
Aside from being very grateful for JK’s comment (it is always rewarding to know that other professionals find your work relevant), we noted a sub-topic in their story: The transformation of the choice challenge in the context of an online space. Whether we are ready to accept it or not, the digital economy is the new normal; and online trading (selling and buying) has transformed not just our behaviors as producers and consumers but has also impacted macro-trends at a global level. There is no question that the digital transformation is fueling tectonic shifts in human mindsets and behaviors; but what do these shifts mean for the challenge of choice paralysis? JK’s story suggests that shopping online might come with new, modified challenges – what are they?
Referring to the previous post, there are three key factors that generally affect the choice — buyers, product, and the context of the purchase. Each factor, or each agent of choice, comes with a collection of characteristics that define whether in a particular situation for a particular person having more options of a particular product to choose from is a good thing or a bad thing. We are not going to iterate all of the characteristics, but rather will focus on those most relevant to the choices made in the digital space.
Let’s start with the context. The first and most obvious difference between buying something in a shop and online is the fact that we cannot experience the product we are buying until the purchase is done. Yes, there are photos and 360-degree videos of products, some websites use sophisticate tech to even help you “try on” a piece of clothing or glasses; yet, these technologies are still not enough to replace the actual physical experience of seeing the size of a jam jar or testing the softness of a baby blanket.
What is the impact of the above on the product and buyer? In terms of the product, it becomes difficult to (a) accurately assess the characteristics of a particular product, and (b) clearly separate product variations from each other. In other words, the product variations might lose their distinctiveness, making a choice more difficult.
When it comes to a buyer, the need to select among not-so-distinct variations of a product in a context where experiencing of the product can only come after the money is paid (a) tests the risk tolerance of that buyer, and (2) leaves them uncertain of whether they choice the best value for their money. The former experience might lead to purchase anxiety (as the majority of humans have low risk tolerance, especially when it comes to spending money); the latter experience might result in buyer’s regret – neither are really the emotions sellers want the buyer to experience when spending money. The negative impact of perceived risk, anxiety and regret are especially pronounced in countries, where online market place is in its nascent stages – as per the study the digital retail in Egypt (Aref & Okasha, 2019).
Surely, some level of anxiety and regret exists even when a buyer is making a choice at a physical shop. What do buyers do then to cope with these feeling? They would likely ask a shop attendant or a brand representative for a recommendation – to get more information to support the choice, to understand product benefits that are not immediately obvious, but most importantly – to share risks of buying a wrong product with another human. The sharing of the risk is important for “keeping the face” (it’s not me who made a mistake), having a point person for fixing the mistake (an attendant gave me the wrong product, the attendant need to refund me), enjoying some peer-to-peer education, and so much more. And that’s where we arrive at the second critical difference between offline and online shopping – there is no human immediately available to provide information, education, assurance and space for shared responsibilities. Yes, many online shops nowadays offer some sort of a chat-with-us option, but in most cases 30 seconds into a conversation it becomes very clear that it’s not “us” – it’s a machine fine-tuned to stir you towards closing the deal, i.e., making a purchase – as you can see in this post exploring online consumer behavior, digital buyers rank their experience with a live customer rep as the second least satisfying among all factors that affect their shopping.
So, how do digital consumers cope with this challenge? A brief desk review reveals a number of techniques:
1. According to Shanthi & Kannaiah (2015), some online shoppers lean towards product categories with limited risk (books) or limited choice options (movie/concert tickets). In fact, in the case of movie or concert tickets, the choice is made before the purchase (we are going for a movie around 6-7pm), and the purchase supports/reinforces the choice.
2. When the choice is unavoidable, some shoppers try to supplement online shopping with the familiar and relatively safe context of shopping at a regular store, that is – they experience a product (and a salesperson support) at a regular shop and then complete the purchase online (Katawetawaraks & Wang, 2011). This behavior does seem to be slowly fading away, yet almost 1 in 5 online shoppers is still checking the product at a physical shop before buying it (for a better price!) online.
3. Regardless whether they can try a product at a shop before buying online, 4 in 5 digital shoppers refer to their networks for recommendations – they ask friends and read strangers’ reviews about the quality of the product they want to buy. In other words, they replace an interaction with 1-2 salespeople at a shop with an interaction with 1 or more trusted people, groups or networks to still gain assurance, keep the face, share responsibilities, and troubleshoot in case the online purchase doesn’t work out.
What’s the conclusion? Online shopping might save some money and the labor of going to a shop, walking around, and filling up a cart. But it does not necessarily save consumers time because the digital context of shopping makes choice more complicated and shifts responsibility for de-risking the choice from salespersons to consumers.
What’s the solution? There likely will be several for different types of consumers (never underestimate the value of a good segmentation!); however, it appears that sharing choice responsibilities with consumers and then rewarding them further for taking risks might be two most promising directions: According to research, digital consumers are more likely to buy if there are offered discount coupons (rewards) and/or free delivery and returns (sharing responsibility). Humans, not machines, manning digital chats would also be an option, even if for a short period – until we are all more comfortable interacting with perfectly0rational-AI-powered helpers. Regardless a specific direction for improving online shopping experience, we always need to think about the actual person typing on the keyboard – what would make her/his experience faster, easier, more enjoyable, less frustrating?
As my father would always say, “The next stage of your life should be different and better, not just different.”#marketing #segmentation
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