Choice architecture simply means that the way a choice is presented influences how the choice is made. This concept is a very important tool in influencing shopper behavior because choice options can be designed to influence people to choose as we would like. Here are 3 different ways choice architecture can be used to influence shopper behavior.
1. Default Choices
People generally don’t like to make choices, so they use social norms and other cues to help them make a decision. They are afraid of making the wrong choice and so they make the choice that everyone else is making. That is to say, they make the default choice. For example, when buying a novel online, many people just choose the one marked “best seller.”
However, default choices are not fixed, and people can and learn to change their behavior if they feel the default choice is not to their advantage. A common example of this is default software that automatically installs an unwanted toolbar on your browser. Over time many people simply opt-out of making the default choice.
2. Limiting Choice
By offering a single product, many companies take the decision making out of having to make a choice for the consumer. Take for example, WD-40 or Red Bull. The brand name has become synonymous with the product. It’s also important to note that presenting the consumer with too many choices – as in too many brand extensions – may result in poorly conceived choice architecture. For example, many food brands release low-fat variants. The impact to the regular version might be that it is now seen as unhealthy and the low-fat version might be seen as not tasting as good. This has the unintended consequence of leaving the consumer confused and they may go to another brand.
3. Extra Choices
By providing a third or extra choice, brands can reframe the other two to make one look more advantageous. For instance, a magazine offered an online only version for $59 and a print and online version for $125. Most people chose the cheaper online only version. But when a third, print only $125 version was offered, suddenly sales of the print and online version increased, increasing the overall value of subscriptions. The print and online version looks like a deal at $125 when compared to the print only version for the same price. Buyers were moved from a ‘money saving’ frame to a ‘value maximizing’ frame. Both can be considered rational choices.
Choice architecture and the implication for online shopping
Guide your customers to choose the item you want them to buy by using good choice architecture. Poor choice architecture in online retail can actually drive your customers away. Consider the following:
Anchoring – Give customers a frame of reference and guide their purchasing decision. People tend to be indecisive and price plays a large role in purchasing decisions. Comparing prices allows a customer to deem if a price is too high or too low and come to a decision. For example, when offering an online subscription for software, highlight one price package in the middle range to make the decision easier.
Box software highlights their “business” pricing plan for their cloud content management service.
Another way to use anchoring is with an add-on. By anchoring in the add-on item, you can get customers to choose a more expensive option than what they may have chosen otherwise because they are already on your site and it’s convenient. Buying a printer and ink cartridges in one transaction on the same web site saves time, but in actual fact it may be cheaper to wait and buy the cartridges from Amazon, but people rarely do.
Tyranny of Choice – Sometimes too much choice can result in indecision and a lost sale. By guiding shoppers through a limited number of choices, the online retailer makes the process of choosing seem more manageable. Ecommerce web sites can achieve this by presenting shoppers with broad categories first (e.g. jackets, shoes, pants) and then narrowing down the colors or features from there instead of presenting too many products all at once.
Social Herding – People tend to make the same choice others do because it provides validation. Placing a “best seller” call-out beside an item that has multiple options puts peer pressure on the buyer to by a certain item even if the price point is above what they’d normally be willing to pay. The thinking is, “after all, if it’s a best seller, others must have been happy with that choice and therefore I will be too.”
There are several ways to design choice architecture into your web site:
Provide default options – If three different shipping options are provided – Standard (free), Next day (with cost) and Next day, free with membership registration, you could make one of the options the default, in others words, the one you want them to select. You just have to make sure the default option is not always the most expensive one or you may unintentionally drive customers away.
Provide Feedback – It’s important to offer reinforcing feedback along the check-out process – this helps them move in a positive direction towards the buy button. For example, after a customer adds a product to the cart, you can suggest they check out and pay or continue shopping.
Anticipate Errors – Your customers will make mistakes during the checkout process and it’s important to make sure they are avoided. For instance, is the site designed so that it is easy to accidentally delete an item from the cart? A workaround would be to have a “Are you sure you want to delete this?” message pop before they can actually delete it.
Choice architecture is a fine balancing act. Providing a choice can make the consumer feel in control however too much choice can make them feel bewildered. Shoppers need help making good choices and good marketing should help them make informed decisions that they feel happy about.