Decisions, Decisions!: What Happens When Brands Offer Too Much Choice?

In 2000, Columbia University psychologist Sheena S. Iyengar and Stanford University psychologist Mark R. Lepper conducted “The Jam Study” on the “choice overload hypothesis,” or the idea that although a wide variety of choices may be initially desirable to individuals, an abundance of options may also have a negative impact. They found that people were more likely to purchase jams or chocolates when offered a limited array of six choices rather than 24 or 30 choices. They also reported that participants were happier with their pick when choosing from a smaller selection. Unlimited choice, they found, can lead to more dissatisfaction. In other words, fewer options equals more satisfaction.

Fast-forward almost two decades and the “less is more” mantra has led to the rise of direct-to-consumer, uncluttered brands that offer pared-down portfolios of essentials. They are “item-driven” brands—to borrow a term used by Michael Preysman, founder of Everlane, an early example of the minimalist brand paradigm. This concept is reflected in their product inventory: fewer products that make choosing easier—and more obvious—for the consumer.

And as we look even further, we see that it’s not just the hip, new brands embodying this ethos of simplicity—large, multi-offering corporations are rolling back their merchandise lines as well. Tracking the performance of today’s trending names to the most iconic brands, we look at how brands are still embracing the ideal of “less is more,” 17 years after the study was revealed.

Successful Brands Start Lean

Casper, the startup behind the increasingly well-known mattress in a box, exemplifies a minimalist brand offering. With hundreds of millions of dollars in annual sales, the startup’s success was built off a singular product. Walking into a mattress store can be intimidating due to the sheer number of options available. Casper struck gold by turning the industry on its head and deciding to sell just one mattress—for everyone. Casper’s brand language echoes this restraint. Their slogans include “Great sleep, made simple” and “Less stores, more snores,” alluding to their made-easy disruption of an industry packed with too many options and hordes of middlemen.

Away takes a similar approach. As a direct-to-consumer, item-driven brand with $48 million in sales, Away sells luggage in only four models: The Carry-On, The Bigger Carry-On, The Medium, and The Large. “Functionally minimal” is how the brand describes itself. There’s even a “Compare” tab on their website, neatly listing the number of days and outfits that can fit in each model, as well as what plane size accepts it. If having four choices is too overwhelming, these points of differentiation further simplify the decision, guiding the consumer through the process.

“Less is more” isn’t limited to homewares and travel items. This year saw the launch of Brandless, an e-commerce startup backed with $50 million, offering a line of fixed-price food and household items. Brandless champions quality goods stripped of brand tax (the hidden cost one pays for the name of a national brand), allowing their products to be transparent in cost as well as ingredients. With every generic item priced at $3—from honey labeled “honey” to a pizza cutter labeled “pizza cutter” —Brandless cuts the time and effort spent in making brand and price comparisons.

In all these cases, language further highlights that simplicity is core to the brand promise. Casper’s mattress is named The Casper. Away’s product names are utilitarian descriptions of what they are: The Medium and The Large. This strategy also suggests a premium, authentic, and essential feel. It’s not just the medium-sized bag, it’s The Medium. As “The Jam Study” brought to light, the perception of fewer options can lead to greater satisfaction because consumers believe their selection was the one and only item to fit their need.

Big Brands Pare Down

Even large brands that embrace more options are finding it necessary to scale back. In a new streamlined direction, Dunkin’ Donuts is cleansing its menu in hopes of reinvigorating sales. They are cutting their current offering of 30 donut varieties by almost half, to 18. The U.S. and Canada president of Dunkin’ Donuts, David Hoffman, defines it as “one of the most aggressive simplification efforts I’ve ever been part of,” and expects sales resistance to be minimal.

U.K. supermarket chain Tesco similarly conducted a massive purge two years ago, drastically reducing their 90,000-product line by 30 percent, in response to struggling sales and competition from cheap and simple retailers like Lidl and Aldi. For context, Aldi had one type of ketchup on its shelves—Tesco had 28. “If you go into Tesco you will be faced with three or four bays of air fresheners,” said Bryan Roberts, an analyst at the market research group Kantar Retail. “It’s painful for the shopper to navigate.”

And perhaps most aggressive was Victoria’s Secret’s recent decision to cut an entire collection from their product line—swimwear, a $500 million-dollar business accounting for 6.5 percent of the company’s sales. Their new streamlined program now focuses on just three categories: Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and PINK. CEO Les Wexner’s statement on the cut sums up the core of the “less is more” psychology: “We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model.” With almost 62 percent of the lingerie market, this was a strategic move for Victoria’s Secret to stay firmly at the top.

We expect that in the future, more companies will be taking measures that reflect “The Jam Study” and its findings. With the rise in popularity of item-centric startups and the rate at which existing players are decreasing their inventory, brands will find success (and a satisfied customer) when they keep their product offerings straightforward and minimal.

posted by Magnify Team | December 13, 2017 @

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