Freedom is choice?

We now live in a world, where as consumers we have virtually infinite choices when it comes to choosing a desired product. Even a simple search on amazon for ‘t-shirt’ yields over five and a half million results. Neoclassical economics portrays consumer choice as something that is determined by a hierarchy of effects, that persists with a rigid cognitive model. Moreover, consumers develop ‘needs’ and then conduct research encompassing every conceivable option. After delicately balancing all of the conceivable benefits and drawbacks, then finally they make their decision to purchase. This is of course absolute nonsense in most purchases, but marketers are often guilty of falling into the trap of perceiving this as reality.

It was long-considered choice when it comes to consumption is tantamount to freedom. Henry Ford so famously stated that customers could have their car any colour, as long as it was black – that was until other car manufacturers began to offer the freedom to choose other colours, spelling an end to the Fordism era. On its own, this lends support to the idea that the abundance of choice enables consumers to live their lives by their own mantras, and validates their identities. However, to assume that the correlation between  the benefits and the amount of choice consumers is positive and linear is both naive and wrong.

Seminal work conducted by Iyengar and Lepper challenged the popular misconception that choice was invariably positive (Iyengar, Lepper, 2000). Two jam-stalls were launched:  stall A contained 6 varieties to sample, whilst stall B had 30 varieties. It was observed that at stall A, 30% of consumers went on to purchase one of the products. Conversely for stall B, only 3% of consumers purchased any variety of jam. These results are the complete antithesis of the neoclassical view of the consumer. In this instance you would expect that a rational consumer in possession of all the possible information about the products at stall B would be able to arrive at a decision as to what one to purchase. 97% of the time, they could not. This demonstrates that a solely rational model is absurd, particularly as it ignores emotional-driven choice.

Faced with a staggering amount of products humans are incapable of being able to process all of the information cognitively. Thus the laws of emotional responding framed by Frijda are significant in their effects here (Frijda, 1988). The law of apparent reality, whereby things that we imagine will heavily influence consumers in their decision making. The law of closure is the absoluteness in our response to emotions that tends to lead to immediate action. Let’s take these ideas and apply it to shopping behaviour. Imagine we’re walking around our local supermarket, with a vast array of similar products on offer. It’s not possible cognitively, to process and cross-reference all the products. Leading you to succumb to your imagination; the niggling thought that you will pick the wrong product. These emotions paralyse your ability to make a decision, so you continue walking, empty-carted.

One might argue that faced with so many options in the market hedonic adaptation means that almost invariably, we’re left feeling deflated – that is we rapidly get used and desensitised to the pleasure that each new purchase provides (Schwartz, 2004). The market has synthesised our constant need to satiate these desires leading us to crave the next MacBook, the next sound system, and so on. Almost akin to running on a treadmill with happiness or satisfaction dangling out in front of us. During times of less choice, we made do with the limited decisions that we could make, it wasn’t necessarily our responsibility if these decisions didn’t meet our expectations and thus expectations were lower across the board.

A simple experiment selling jam may seem detached from the market, however a prime example of this paradox is the astronomical rise of the German supermarket Aldi. In 2015 it overtook Waitrose as being the sixth biggest supermarket in the UK. Aside from the low prices, consumers are offered only 1400 products compared to the typical 40,000 offered by other supermarkets, this is a major contributing factor as to why their sales volumes are increasing at a rate of 15% a year. One example in digital in the digital space that demonstrates how successful a return to simplicity can be is The Dollar Shave club. The product landing page seen below shows that there are only three possible options compared with the countless options seen in supermarkets. The success of this company lead to it being purchased within 5 years of founding for $1 billion dollars by Unilever.

screen-shot-2016-11-01-at-19-15-34

Unless a radical change occurs the in the market, it will continue to perpetuate the hedonistic treadmill that leaves consumers constantly craving more and maintaining unobtainable high expectations (Schwartz, 2004). If we as consumers realise that freedom of choice is only beneficial to an extent, then will we begin to see increasing amounts companies like the above emerge. Companies that will continue the trend to simplify, and don’t exploit consumers with excessive choice.

References:

Iyengar, Sheena S.; Lepper, Mark R. Journal of Personality and Social Psychology, Vol 79(6), Dec 2000, 995-1006.
Frijda, Nico H. American Psychologist, Vol 43(5), May 1988, 349-358.
Schwartz, B. (2004). The paradox of choice. New York: Ecco.
Lutz, A. (2016). This is how Aldi is killing Waitrose in Britain’s supermarket price war. [online] Business Insider. Available at: http://uk.businessinsider.com/why-aldi-is-so-cheap-2015-4?r=US&IR=T [Accessed 10 Nov. 2016].
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