Presenting consumers with the right choices in eCommerce

Have you heard of Hick’s law? Well, until recently, me neither. In essence it’s quite simple. In making a choice, decision time increases logarithmically the more options you put before someone. So if it takes someone ten seconds to choose between two things it will take more than 20 seconds to choose between three things. By the time you get to 20 options the decision time has grown way past 10 seconds multiplied by 20.

The result is something called decision fatigue and it’s the curse of online shopping. You just want something simple like a work lamp or a frying pan so you search for it on one of the big online platforms and you’re faced with 10,000 or even 100,000 results. If your time is worth money, any savings you make by shopping online can easily be offset by the cost of the time you spend selecting the thing you need. Even if it’s not it can just be draining.

The challenge for eCommerce marketplaces is that they can’t easily exclude sellers from the search results and that leads to an overwhelming array of choices; overwhelming because eventually the brain gets tired and we know that leads to poor decisions. How many of us have tried to navigate what should be a simple online shopping search and have given up through sheer exhaustion?

Bricks and mortar retailers have been dealing with this phenomenon for pretty much as long as they’ve had the ability to source more things than they have shelf space for.

Understanding your customers and taking responsibility for part of the decision-making process so that shoppers are presented with an ideal, manageable range of choices is part of the fundamental retail skillset. Retail buyers spend their life doing exactly this: researching the market, understanding the data and customer demand, and selecting the best products. They even consider that ‘new idea’ from online retailers of ‘customers who bought this also looked at this’. It used to be called linked purchases.

What eCommerce has all too often done is pass this choice back to the consumer. It’s a case of ‘rather than try to second guess you here are all the things; you pick’.

Some big box retailers risk suffering from a little of the same. You may not have a choice of everything the internet has to offer, but you do have so many options that it becomes harder to make decisions efficiently. There are people who won’t shop at hypermarkets because the choice is too large. They get ‘blinded’. This is Hick’s Law at work.

Walmart seems to have cottoned on to this. CEO John Furner told an audience at the National Retail Federation (NRF) earlier this year that they’re in the process of reducing the number of stock keeping units (SKUs) on offer to cut decision fatigue for their customers. You might call it a ‘less is more’ approach. It makes sense. If you’re worn out after making your first three choices, you might cut your shopping trip short.

Traditionally, optimising the choice that will please the most consumers while making the maximum use of space has been one of the core skills of buyers. Ideally this involves assessing every product type individually and asking how much choice and what sort of choice your customers might want if they’re planning to get that sort of item. It will vary from store to store and by customer type including whether people will be shopping for utility or pleasure, in town or out of town, and it will be affected by local competition. It requires an understanding of decision trees for each product category – which products will substitute if a regular choice is unavailable or which ones will people switch to if it’s promoted.

Organising some categories might be fairly simple. How much choice do we need when we’re buying bin liners? People might be happy simply to be offered a branded item and an own-label equivalent and shopping habits might not vary much across the UK.

But how about rice? In North Norfolk, for instance, where the average age is 54 (against a national average of 40) and the population is overwhelmingly white, rice may not be a particularly significant part of people’s diet so a narrower range might well be better. In London, in very diverse areas, consumers won’t just want a choice of basmati, sushi rice, sticky rice, brown, short grain, Thai fragrant, Arborio and so forth, they’ll almost certainly want choices within those narrow categories. Corby in Northamptonshire is a hotspot for Scottish brands because the steel industry drew a lot of steelworkers and their families from Scotland.

Getting the assortment right has multiple benefits. Removing unneeded SKUs within a category frees up room for different product types. It makes decisions easier, people can shop more in less time, and going to the store becomes a more attractive option than buying online.

However, working out all these permutations manually is immensely challenging. Having a system that can crunch the numbers and process huge amounts of data is essential. The irony is that many online businesses have the power to do just this but choose not to. Bricks and mortar businesses can use the same tools to treat finite space as a virtue and make shopping easier. And by the same token perhaps online retailers will have to give buyers their due and become more like traditional retailers rather than primarily being technology companies!