For Today's Customers, Less Is More

While choice is a pillar of American consumerism and companies are expected to continually innovate, one-third of U.S. consumers feel that companies are offering them too many choices, prompting Forrester Research to conclude that companies should adopt a less-is-more rallying cry for innovation this year.

When presented with too wide a variety of choices, 41 percent of consumers will pause and research more before making decisions and 30 percent will revert to their most familiar brands, the research firm found.

Forrester said that companies today often give people more choices than they need, especially considering that new products often fail in their second year. In fact, Nielsen reported that 300,000 new products are launched in the United States year after year and nearly a third (30 percent) never make it to a second year on the market.

Forrester has observed decision fatigue among consumers, which Audrey Chee-Read, one of its principal analysts, said stems from “the tailwinds of the pandemic” and “the flux of news headlines on a coming economic recession.”

The COVID-19 pandemic resulted in more thoughtful decision making than ever, Chee-Read said, citing data from the American Psychological Association that showed that nearly half (48 percent) of Millennials were so stressed by the pandemic that even though it has faded into the background, they still struggle to make the most basic of decisions.

Information overload is also contributing to decision fatigue, according to Forrester, which noted in a separate report that 64 percent of U.S online adults spend time comparing products before buying. Additionally, nearly half (45 percent) said they actively use smartphones to research products while shopping in brick-and-mortar stores, and nearly half (48 percent) check online to ensure that products are available before venturing out to the store to buy them.

Economic conditions are also affecting consumer decision making, the research firm said. Though spending in some areas, particularly in travel and related industries, has continued to be strong despite the highest inflation in decades, in other areas, consumers are dropping name-brand items for less expensive private-label products.

Forrester’s research found that one-fifth of U.S. online adults are now buying more private-label products, while nearly as many (19 percent) now find themselves shopping more at dollar stores. Additionally, a little more than one-third (35 percent) are buying fewer products, while 39 percent report looking for more deals than previously.

For companies looking to capture these harder-to-come-by dollars, companies should look for a balance between offering customers enough choices, but not too many, Chee-Read said.

The key, according to Chee-Read, is to focus on products and services that are core to each company’s business and to eliminate others. Even though some customers might have expressed interest in certain items, there might not be enough interest to warrant the extra expense of carrying it.

This is a common practice at quick-service restaurants, which are constantly reviewing their menus to scale back choices.

But they are more the exception than the rule, according to Chee-Read. “Instead of innovating meaningfully, brands are seemingly throwing spaghetti on the wall to see what sticks,” she warned.