The December issue of the Economist has an interesting article on the disadvantages of overwhelming choice. The problem is known, but the article is extremely well researched and ties the topic very well together, so I want to summarize it here and then comment on why it’s relevant for Mass Customization.

Choices have exploded

Many of you know this very well as mass customizers, but even in the mass produced world, choices have exploded. The article mentions that an average American supermarket has five times as many items on shelves today (about 50,000) than it had in 1975 (about 50k today).

Many of these options have improved life immeasurable in the rich world…”

But: Is it too much choice?

However, research has proven many times that too much choice is demotivating. In a study in California, shoppers offered one group 24 jams to sample, another only 6. The shoppers with the larger choice ended up being less likely to buy though - only 3% of them purchased a jam, compared to 30% of those who had had only 6 jams to sample from. The same research results held up when they tried different products (interestingly enough - chocolate was one of them). There was one outlier: Germany! “German researchers, by contrast, found that shoppers were not put off by too much choice, whether of jams, chocolates or jelly beans…”. 

Barry Schwartz, who really made the topic a conversation when he wrote the book “The Paradox of Choice”, says in it:

At this point, choice no longer liberates, but debilitates. It might even be said to tyrannise.”

The article further says that what makes choice so overwhelming is the downside: The cognitive dissonance, after the purchase, the possible regret of having chosen the wrong thing. 

What does an aversion to choice mean for businesses?

The traditional answer to people’s aversion to choice are brands. Brands that are well marketed and that hence feel like a “safe choice”. Indeed, as a German I remember being surprised upon my first visit to the US how brand conscious consumers are in the US. The article sums up:

Indeed, in a wolrd that celebrates individualism and freedom, many people decide to watch, wear or listen to exactly the same things as everybody else.

But let’s look at what choice does for sales. The article has several examples:

• Tropicana introduced a greater variety of fruit juices (20 instead of the former 6), and increased sales (albeit in Great Britain) by 23%. Choice led to higher revenues.
• P&G reduced the choice in the Head & Shoulder assortment - instead of 26 different options, they offered 15. Sales increased by 10%
• A 2006 Bain study recommends that lower complexity and choice can increase revenues by 5-40%, while cutting costs at the same time

Finally, I want to highlight the quote of a life coach in the article, who says “Young people have grown up with masses of choice.”

Implications for Mass Customization

With mass customization, choice explodes much more than a tenfold increase of items in a supermarket. Take chocri - on the website, you can create 27 billion different chocolate bars, each single bar requiring you to choose from over 100 modules. When I first joined chocri, one of my first questions was “But what about the paradox of choice?”. Now that I know more, I think there are 4 implications for mass customization businesses from the findings highlighted by the Economist article:

1. Navigation of choice: This is something that Prof. Piller has been saying for a while. Within the 27 billion chocolate bars, there’s one that’s more likely to make the consumer happy than others. I can think of two ways to facilitate navigation of choice. The first is a recommendation engine, similar to the recommendation engine on the chocri page that recommends you toppings based on your previous selection. But a recommendation engine could also be an integration with hunch, the internet’s personalization machine. It takes for example your Facebook profile and can recommend you the perfect combination in an instant. Also, smart process design is a way to help consumers navigate too much choice. NikeiD’s success is partially due to the fact that many customers discover a product on the Nike website that’s 90% perfect - if only it had a differently colored sole. In comes NikeiD, you can make a product 100% perfect and don’t have an excuse not to buy it anymore. Similarly, the process on a customization website can ask a few questions and, according to the answers given, narrow down the choices presented on the next pages. Finally, keep in mind that function is a way to navigate choice: Taste in customized chocolate bars, fit in the case of jeans, whether customized earrings match your wardrobe…
2. Reduction of choice: An easy one, and something we’re doing at chocri: cutting away toppings that too few customers demand. It’s something that has to be done carefully so as not to lose the appeal of an offering that fully covers a niche, but many of the toppings we’ve cut haven’t been missed much.
3. Branding: Just as it applies to mass produced goods, branding is a task for mass customization companies as well. Keep in mind that consumers are not only choosing from your custom sneaker, they’re also choosing from the entire array that’s in Foot Locker. If a brand helps them sift through the overall choice, you should have a strong brand to reduce the choice from all the sneakers in the world to only your billions of options.
4. Target market selection: I have written about mass customization in Germany vs. US vs. other countries before, and the article finally seems to offer up an answer: Not every consumer in the world is open to choice in the same way. It appears that Germans demand more choice than Americans, and maybe the British (see the Tropicana case) like it a tad more, too. Also, young people who grew up with it are less intimidated by it. What that implies to me as an entrepreneur is that there are different types of consumers who are more likely to respond positively, if not even demand the choice that comes with a customized product. So choose your target market well.