How Much Choice Should Consumers Have? | INSEAD Knowledge

The retail sector bends over backwards to give the consumer an inordinate number of product choices, and yet, does the consumer want so much variety?

Variety packs are everywhere, whether they’re multi-coloured sock packs, multi-flavour yoghurts or multi-packs of chocolate bars. Retailers believe that bundling different items together is answering consumer demand, but the reality is something else.  In fact, they would do better to offer more of the same in bundled packs.  We all have preferences, whether it is in terms of our favourite colour, flavour or song, and when we find ourselves in the supermarket aisles, buying in bulk, these preferences make themselves no less felt.

However, as our research shows, a lot of it has to do with how many choices we are actually making when we stand in front of the supermarket shelf.  In my paper, “The Offer Framing Effect: Choosing Single versus Bundled Offerings Affects Variety Seeking” co-authored with Mauricio Mittelman, Eduardo B. Andrade and C. Miguel Brendl, we show that when there is only one choice act to make, participants were systematically less interested in seeking variety in their product choices.  This is the case when we are looking at, for example, a six-pack of soft drinks — in order to purchase six cans, we only have to make one choice if they are packaged together — compared to buying six cans individually where we are making a choice six times over.  The implication for retailers is that you don’t have to indulge in price promotion on multi-packs because by offering consumers more of the same, they will get what they want and be happy to pay the price.

via How Much Choice Should Consumers Have? | INSEAD Knowledge.

via How Much Choice Should Consumers Have? | INSEAD Knowledge.

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About Vaibhav Gupta

Strategy Consultant, Open Source Enthusiast, Cooking Hobbyist, Photography Enthusiast. View all posts by Vaibhav Gupta

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