Choice is not always a good thing if the consumer feels overwhelmed by it. Younger consumers may welcome abundant options, but for older, less cosmopolitan people, too much choice is annoying
Consumer choice has vastly increased in the past 20 years. Across the widest variety of markets, choice has simply mushroomed.
Successive governments have pursued a policy of encouraging choice as a means of improving the well-being of the nation. The great variety of choice was once seen as a purely benevolent force and something to be celebrated - an expression of the affluence and contentment of the developed economies of the West.
But is choice always a good thing? Can it actually start to be a deterrent for consumers? Future Foundation research has shown that in a number of areas, consumers are experiencing choice paralysis - too much choice is making consumers' lives more difficult, rather than easier.
Deregulation and flexible manufacturing processes have encouraged a much greater range of goods and services. Supermarkets can now stock anything up to 70,000 lines. People shop on a much more individual than household level. The average household has three different cereals and shampoos. Younger people are especially likely to maintain a wider repertoire of goods.
In markets where choice did not previously exist, it has been introduced deliberately. For instance, British consumers now have a wide choice of television, gas and electricity suppliers. They are also faced with a choice of hospital.
Choice is still often very beneficial for consumers. They love a bargain or a range of clearly differentiated products.
However, in many markets, consumers do not gain the same advantages from wider choice. The development of behavioural economics has illustrated the paralysing effect that choice can have. Barry Schwartz's work - outlined in his book, The Paradox of Choice - has robustly argued this case.
The research shows consumers' desire for choice varies widely between markets. In high-cost or high-prestige sectors, consumers often appreciate the benefits of a wide range of products - but this quickly diminishes in commodity or low-prestige markets.
It also tends to be the case that the consumers who are most receptive to wider choice are younger or more affluent, in no small part because they are the best at managing choice.
These are also the groups where access to various choice managing tools is most common. The Internet has proved especially useful in this regard, with websites such as uSwitch, Froogle and Amazon offering consumers highly efficient ways through the maze of rapidly-spreading variety.
However, this is also a situation from which brands can benefit. Consumers look to trusted brand names to simplify their decision-making process. In the conversation economy, familiar brands can be invaluable as reliable sources of information and advice. This will become even more the case as the media becomes more fragmented and user-generated as it too falls under the same influences of choice creation.
Choice remains a positive thing for consumers in many senses. But the sheer scale of it, particularly in low-ticket or low-interest markets, can actually be a negative influence.
In these circumstances, an opportunity develops for marketers and brands to position themselves as advisers and choice-editors. For firms already having to adapt to the newly empowered consumer, this offers a chance to adapt their brand for the future environment and aid the transition to the conversation economy.
Copyright: Centaur Communications Ltd. and licensors
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