By  on October 16, 2006

Are the many choices offered to consumers becoming detrimental to the health of a retailer's business?

Barry Schwartz, a professor at Swarthmore College and author of "The Paradox of Choice," thinks so. Schwartz offered his insights into consumer shopping habits during a presentation last week at the New York Hilton hotel. Schwartz told attendees that, while offering some choice is a plus, too much choice often results in consumers buying less and being less satisfied.

As an example, Schwartz said to imagine walking into a store for a pair of jeans and finding multiple options from style to fit. Schwartz said this creates a scenario where consumers end up second-guessing themselves after the purchase and presume that their choice was wrong.

Schwartz said when retailers offered fewer choices, the lowered expectations created an easier threshold to meet in terms of customer satisfaction. That's not to say offering consumers choices is a bad idea. What retailers need to do is edit the choices for their targeted customer while "manipulating the amount of choices and then assessing [customer] reaction," Schwartz said.

A good example of this type of editing and manipulation can be found at Greek-style diners. Despite multiple menu options that span multiple pages, the items customers often order are the ones listed on a sheet clipped to the menu labeled as the specials for the day.

Schwartz also cited warehouse club Costco as satisfying its customers. The retailer offers good prices but limited choices. "People don't feel tortured when they shop at Costco," Schwartz said.

Ann Taylor Stores is another company to study. "Maybe there's no skinny, but [you'll see] slim silhouettes," Schwartz said, adding that the company recently cut inventory by 17 percent and saw sales rise by 22 percent.

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