Tag Archive | "consumer"

The Jam Study Strikes Back: When Less Choice Does Mean More Sales

Tags: , , , , , , , , ,


shutterstock_141882922

The Jam Study is one of the most famous experiments in consumer psychology, and new research to be published in the Journal of Consumer Psychology supports the Jam Study’s controversial conclusion; offering consumers less choice can be good for sales. Critically, the study reveals when precisely offering less choice may enhance your sales.

If you’re not familiar with the Jam Study, it’s here.  Basically, the study, which was conducted at upscale Bay-area supermarket Draeger’s Market by psychologists Sheena Iyengar and Mark Lepper, found that consumers were 10 times more likely to purchase jam on display when the number of jams available was reduced from 24 to 6. Less choice, more sales. More choice, fewer sales. Weird, huh?

This phenomenon, replicated in a variety of product categories from chocolate to financial services to speed dating, has come to be known as ‘Choice Overload’ or the ‘Paradox of Choice‘. It’s a paradox because rationally speaking the more choice you offer your customers, the more sales you should make simply because you’ll be satisfying more needs better. But research showed that choice actually can be demotivating, and get in the way of sales. Why?

Psychologically, the Paradox of Choice is not so much of a paradox because the more options you give people, the more time and effort they have to invest in making a choice – something they may not be prepared to do.  Moreover, giving your clients, customers or consumers a smorgasbord of options puts a psychological burden on them because what you are actually doing is giving them more opportunity to make the wrong choice, regret it and blame themselves.

Nevertheless, the Jam Study and follow-up studies (with other product types) has remained controversial – surely giving your customers more choice is a good thing?  Indeed, a meta-analysis of studies in 2010 found that the inverse link between choice and purchase likelihood is from consistent.

But now a new study, ‘Choice overload: A conceptual review and meta-analysis‘ by Kellogg researchers at Northwestern University Alexander Chernev and Ulf Böckenholt (and Joseph Goodman) has re-analaysed the data from 99 Paradox of Choice studies and has isolated when reducing choices for your customers can boost sales

  • When people want to make a quick and easy choice (effort-minimizing goal)
  • When making the right choice matters/you are selling complex products (the decision task is difficult)
  • When you show options that are difficult to compare (greater choice set complexity)
  • When your customers are unclear about their preferences (higher preference uncertainty)

So the Jam Study strikes back; more choice can harm sales – but probably only when one or more of these four criteria are met.

CES 2015: The Automaton Rolls On

Tags: , , , , , , , , ,


spiderwave

This Week On The TC Gadgets Podcast: CES, CES, And Some More CES

Tags: , , , , , , , , , , , , ,


Screenshot 2015-01-09 17.11.56

BMW Shows Off Gesture Controls And Automated Parking

Tags: , , , , , , , , , ,


bmwthumb

Google’s Android TV Will Power Sets From Sony, Sharp, and Philips Beginning This Spring

Tags: , , , , , , , , , ,


Sony google tv

Ryan Seacrest Pitches His Mobile Keyboard Startup Typo

Tags: , , , , , , , , , , , ,


ryan seacrest

Facebook execs discuss CES, trends in tech & ads

Tags: , , , , , , , , , , , , ,


shutterstock_172278251

As the tech world gathers in Las Vegas this week for the International Consumer Electronics Show, Jane Schachtel, global head of technology and mobile strategy at Facebook, and Patrick Harris, Facebook’s global director of agency development, wrote about what they expect to see at this year’s CES event.

Schachtel and Harris discussed CES, as well as upcoming trends in tech, in a Facebook for Business blog post.

Schachtel said that she’s looking forward to seeing how tech companies will use all of the recent innovations to make lives better:

Making the Internet of Things matter

There’s been a lot of talk about the Internet of Things the last few years — devices like Web-enabled refrigerators that can tell you when you’re running out of milk — but for the average consumer the Internet of Things only means a smart TV or fitness band. I’m eager to see how the biggest Internet of Things players are planning to integrate more of this innovation into people’s lives.

The need for brand differentiation

This will be the eighth year in a row that new smartphones will be announced at CES. This presents manufacturers with a great opportunity to differentiate themselves from one another. People don’t remember how many pixels a smartphone camera has, but they definitely remember that their camera takes awesome pictures of the beach at sunset. In a crowded and very competitive market, highlighting how these devices impact people’s lives can help separate brands from one another.

Here’s what Harris is expecting at CES:

Keeping pace with change

At CES it’s really easy to be lured in by the new, shiny objects. It can be overwhelming. For me, trial and error is key to keeping up with all the newness. I sometimes talk to clients about the 70/20/10 model. In any given year, 70% of your advertising efforts will be focused on your core strategies and channels, the places you spend most of your time optimizing and refining. Twenty percent is used for some really focused experiments on new platforms. And then 10% is saved for moonshots — things that have a low probability of working now, maybe because they’re very new or untested, but could have a big payoff down the road.

Big data → Big insights

Agencies are looking to simplify their insights practices to drive communications strategies and media priorities. It’s a shift from collecting everything to collecting the most meaningful insights.

Readers: What are you most excited for at CES this year?

Image courtesy of Kobby Dagan / Shutterstock.com.

Article courtesy of Inside Facebook

Cognitive Networks Detects What You’re Watching On Your Smart TV

Tags: , , , , , , , , ,


cognitive networks showtime

In 2015, Consumer Will Be King In Healthcare

Tags: , , , , , , , , , ,


consumer

LG’s New Wi-Fi Speakers Automatically Play Music When Your Phone Is Near

Tags: , , , , , , , ,


lg music flow

January 2015
M T W T F S S
« Dec    
 1234
567891011
12131415161718
19202122232425
262728293031