Is Less Becoming More?
Americans these days have a lot more choices in products and services. But do consumers and suppliers suffer from choice overload? If so, what does this abundance mean for companies?
Less is increasingly more, at least in the minds of customers, according to nearly every respondent to this month's column. However, some cite product complexity as the cause of rising real and psychological consumer "costs" while others point to the proliferation of choice as the cause. F. Chircu helped frame the discussion by writing that "When producers want to differentiate themselves, up to a point the safest and quickest way . . . is to add features or increase product complexity. . . . Choice complexity is usually brought about by . . . 'me-too' producers that want to capitalize on the first-movers' research and development. . . . Regardless of the type of complexity, whether product- or choice-related, the consumer is ultimately overwhelmed."
Addressing the issue of product complexity, K. Root commented, "The difference is when consumers know what they want and when they don't. . . . In the case of a new cell phone, I don't know what I want. . . . Here's where companies make the mistake of competing on technical features for short-term gains instead of providing customers with solutions to their problems. More is just too much."
Typical of comments regarding the issue of choice were those by Mehmet Genc, who said, "As choice increases, search costs increase . . . [and] it takes longer to make a decision. At the same time, due to social changes, we have even less time to make choices. . . ." Marino Dacco commented: "I think we should find the answer in consumer psychology rather than in geographical markets, segmentation, and so on. . . . Too much choice is like having no choice, and buyers will start to feel that."
What to do about all of this evoked a wide range of opinions. Respondents had advice for both customers and producers. After pointing out that "Less is more is probably a great way to be a consumer. If you practice it, you will drill down into your purchase thinking and determine real needs versus discretionary needs," Michael Schwartz asked, "Do you really need those $1,200 Testoni loafers?" Peter Vajda advises, "In our culture, the difference between 'have' and 'happy' is a most difficult lesson to learn indeed, and the psychological impact is great." As for producers, Richard Eckel suggests that "Manufacturers should stop trying to develop these marginal differentiators and expend their creative efforts on new products and processes that create value, instead of slapping a new coat of paint on shopworn goods." Sandi Edgar wrote, "Instead of trying to weed out new products, focus on promoting the best of the new products. The consumers will determine which are successful and which are not."
But just how is "less" achieved? As Martin Reveli points out, "To artificially restrict choice eliminates some elements of competition. . . . Long live the long tail." Can one organization take the initiative without endangering its competitive position? Or does the answer lie in increasing levels of disruptive competition, the strategy of providing less for much less? What do you think?
The issue of whether less is more, both for consumers and suppliers, is being joined by an increasing number of researchers and commentators. It is perhaps indicative of the degree to which affluence combined with technology is making it possible to produce and consume a greater range of products and services. But is this in everyone's best interest?
One who might weigh in in the affirmative is Chris Anderson of Wired magazine, who has popularized the concept of the "long tail," about which he is writing a book. It refers to the tendency of consumers to buy a greater variety of things in smaller quantities when the opportunity is made available to them. Exhibit A is the way in which Amazon stimulates sales by its listing of thousands of books that would otherwise be out of print, given their meager sales through traditional channels. Internet technology and supply chain efficiencies have made this possible.
The implication of Anderson's thesis is that the "long tail" phenomenon benefits producers and consumers alike. But a recent Harvard Business Review article by consultants Mark Gottfredson and Keith Aspinall questions whether there are benefits for producers, particularly those producing increasingly varied products targeted for smaller and smaller market niches. They report that "nearly 70 percent of managers admit that excessive complexity is raising their costs and hindering their profit growth." In other words, there is a trade-off between innovation and complexity on the one hand and profitable relationships with customers on the other. Too much innovation merely increases complexity without creating economic benefits for either the producer or the consumer.
In his book, The Paradox of Choice, Barry Schwartz maps the adverse impact of what he calls the "culture of abundance" on everything from customer satisfaction to mental health. His research findings suggest that "while people in the United States have more choice than any group of people ever has before, and thus, presumably, more freedom and autonomy, we don't seem to be benefiting from it psychologically." In a vast oversimplification of his findings, he concludes that consumers increasingly are beset with worries associated with the inability to choose among increasing options, the increasing difficulty of comparing options, a sense of "missed opportunity" in the buying process, and ultimately stronger cases of what is known among marketers as "post-purchase dissonance" and "buyer's regret." He maintains that increasingly these are contributors to depression. Catherine Getches, who asks "whatever happened to the generic aisle" in stores, laments that we are inundated by new product variations. (Most of these are probably unprofitable as well, according to Gottfredson and Aspinall.) As Getches puts it, "getting out of a convenience store isn't so convenient anymore."
Can we have too much freedom of choice in products and services? Gottfredson and Aspinall suggest raising the investment hurdle rate on new products to stem the flow. But should all new ideas have the same hurdle rate? How can this help a producer sort the better from worse ideas in advance of bringing them to market? Will we as consumers increasingly reject new products in an effort to defend ourselves from their onslaught and maintain our sanity by increasing our loyalty to those we know and trust? What do you think?