• Overview
• Excerpt

Can there ever be too much choice?

In 1925, Prussian immigrant Gustave Draeger opened a delicatessen in San Francisco. Thanks to hard work and enterprise, the business grew quickly. After Prohibition ended, he set up a small chain of liquor stores, and by the time he retired, Draeger had established San Francisco's first supermarket. His sons took over and expanded further, closing the original store but adding several new ones. As a graduate student, I often visited the Menlo Park Draeger's, well known for its awe-inducing shopping experience. The carved oak columns in the atrium, the black marble countertops and dark ceramic floor tiles, the wine section lined with 20,000 bottles--these were just some of the elements that transformed a grocery store into a grand theater for acts of consumership (frequently documented by camera-wielding Japanese tourists).

You could buy the best pots and pans to whip up recipes from any of the 3,000 cookbooks also on sale, and you could pick up some pointers at the cooking school on the second floor. Or if you were too hungry to wait until you got home, the in-store restaurant served $10 gourmet burgers. (Bear in mind that this was 1995, when a McDonald's burger cost 85 cents). Walking down and across the many aisles, you'd see 15 types of bottled water, 150 sorts of vinegar, nearly 250 mustards, 250 different cheeses, over 300 flavors of jam, and 500 kinds of produce. The olive oils were more modest in number--only 75 options--but not in price; some of them, aged for a hundred years or more, were displayed in a locked glass case and cost more than $1,000 a bottle. All of this variety, emphasized in the advertising, was a source of pride and distinction for Draeger's. To introduce people to it, tasting booths were often set up with 20 to 50 different samples of some product. The store was undoubtedly attracting attention for its unparalleled selection, but was that attention translating into sales?

The manager, a firm believer in the benefits of choice, was just as interested as I was in the answer to this question. I convinced him to let me conduct a study with a tasting booth of my own. (We kept it a secret from the employees in order to avoid interference; for example, attempts to influence the customers.) My research assistants and I pretended to represent Wilkin & Sons, supplier of jams to the Queen of England. We chose this brand because we wanted variety and high quality, and we picked jam because it's easy on the tongue, unlike mustard or vinegar, and most people enjoy it, or at least don't seem to mind it.

The booth was set up near the entrance, where it was most likely to catch the eyes of shoppers, and it was run by Irene and Stephanie, two affable Stanford undergrads. Every few hours we switched between offering a large assortment of jams and a small one. The large assortment contained 24 of the 28 total flavors made by Wilkin & Sons. (We removed strawberry, raspberry, grape, and orange marmalade so that people wouldn't just choose what was most familiar to them.) The small assortment consisted of six jams plucked from the large assortment: kiwi, peach, black cherry, lemon curd, red currant, and three fruits marmalade. Another research assistant, Eugene, positioned himself strategically behind some impressive cookware near the booth. From there, he observed people entering the store and recorded how many stopped to sample the jams. He found that 60 percent were drawn to the large assortment but only 40 percent to the small one. (Such was his dedication, he risked arrest to acquire this data; store employees thought he was trying to shoplift the $300 Le Creuset pans behind which he was lurking.)

6 Jams

24 Jams

Meanwhile, at the booth, Irene and Stephanie encouraged customers to taste as many jams as they liked. On average, they tasted two jams regardless of the size of the assortment. Then each person was given a coupon valid for one week that knocked $1 off any single Wilkin & Sons jam. Most of the people who decided to buy a jar did so on the same day they received the coupon. Because we weren't selling the jams at the booth, customers had to go to the jam aisle, make a selection, and pay for it at the register. In that aisle, they might have noticed an employee with a clipboard taking inventory. In fact, he was another member of our team, Mike, and yes, he was spying on the customers. He noted that people who had sampled the large assortment were quite puzzled. They kept examining different jars, and if they were with other people, they discussed the relative merits of the flavors. This went on for up to ten minutes, at which point many of them left empty-handed. By contrast, those who had seen only six jams seemed to know exactly which one was right for them. They strode down the aisle, grabbed a jar in a quick minute--lemon curd was the favorite--and continued with the rest of their shopping. When we tallied the coupons (the bar codes let us know which assortment each buyer had seen), we discovered the following: 30 percent of the people who had seen the small assortment decided to buy jam, but only 3 percent bought a jar after seeing the large assortment. Even though the latter attracted more attention, more than six times as many people made a purchase when we displayed the smaller set of jams.

Number of people who...

Stopped to sample jam

Eventually bought jam

When I shared these findings with the manager, he ruminated on the implications. Everyone could agree that the Draeger's experience was mind-boggling, but what did this mean for how the store should be run? For many people, having one's mind boggled was the whole point of going to Draeger's; it wasn't just shopping, it was entertainment. But in order to thrive, the store required more than just visitors and spectators. A significant portion of the people walking through the doors had to be turned into paying customers, but the fantastic variety seemed to favor browsers over buyers. How could the manager ensure that the very choice that brought the masses in didn't end up pushing them out without so much as a jar of jam for a souvenir?

                                                ---

As the years have passed, the challenges posed by choice, both to customers and to managers, have only grown. In 1994, the year I had my first inkling that there might be such a thing as too much choice, over 500,000 different consumer goods were already available in the United States. By 2003, the number had increased to nearly 700,000, an upward trend that shows no signs of letting up. Technological advances frequently introduce new categories of products into our lives. Some of them--cell phones, computers, digital cameras--become indispensable, and soon enough the options proliferate. Just as importantly, not only are there more goods on the market, there are more ways to get at them. The typical supermarket, which carried 3,750 different items in 1949, now boasts some 45,000 items. Walmart and other "big-box" retailers offer smorgasbords of over 100,000 products to Americans in just about every part of the country. And if you don't find what you're looking for within a few blocks, you'll certainly find it with a few clicks. The Internet extends your reach well beyond local venues, providing access to the 100,000 DVDs on Netflix.com, 24 million books (and millions of other products) on Amazon.com, and 15 million singles on Match.com.

The expansion of choice has become an explosion of choice, and while there is something beautiful and immensely satisfying about having all of this variety at our fingertips, we also find ourselves beset by it. We think the profusion of possibilities must make it that much easier to find that perfect gift for a friend's birthday, only to find ourselves paralyzed in the face of row upon row of potential presents. Which one is really her? Which one is truly the "perfect" gift? This one is good, but how do I know that there isn't something better someplace else, and have I, by now, looked hard enough for it? We exhaust ourselves in the search, and something that should have been a joy--celebrating a loved one--becomes a chore. But can we really complain? This abundance, which many of us take for granted, is not available to everyone. When we question it, we might be accused of looking a gift horse in the mouth, or somebody might offer to play us the world's saddest song on the world's smallest violin. Moreover, whatever our reservations about choice, we have continued to demand more of it, and these demands have not gone unheeded.

One can't deny that all this choice does come with certain benefits, and wasting several minutes in the jam aisle seems like a fairly benign side effect. What happens, though, when the number of options increases for more important and complex choices, such as those concerning finance and health?

The story continues in the book:
The lessons of 401(k)s and Medicare Part D, superstars vs. underdogs on the Long Tail, why chess masters can beat you blindfolded . . . and much more.

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