Should You Examine All Your Options At Once?

Stanford Professor Baba Shiv and Columbia Professor Sheena Iyengar have conducted some interesting new research about consumer decision-making processes.  They created a series of experiments to examine whether consumers were more satisfied when they examined all their options at the same time, versus looking at the options sequentially.

Their experiments involved the purchase of products including wine, chocolate, and nail polish.   The research findings showed that, "Sequential choosers were less satisfied with their chocolates than were participants in the simultaneous group. And, when offered the opportunity to switch to a different chocolate — a randomly selected one, they were told — more of the sequential choosers opted to do so, even though they knew virtually nothing about it."

What explains the higher satisfaction on the part of those examining all their options at once? The researchers argue that hope and regret play a significant role.  People in the sequential situation worry about possible future options (subsequent and unknown) that they may forgo by making a choice now.   People don't seem to have that worry when they examine a wide array of alternatives simultaneously. 

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The IKEA Effect

The Neoacademic blog highlighted an interesting new piece of research last week regarding the IKEA effect.    For years, experts have pointed out that consumers love IKEA products in part because they have to exert effort to put the items together.  Many experts also have recounted the story of the launch of cake mix products in the 1950s.  Originally, the mixes did not require much effort at all on the part of the consumer.   However, when manufacturers changed the mixes to require some effort (adding eggs, vegetable oil, etc.), the mixes began to sell quite well.

In a new study published in the Journal of Consumer Psychology, scholars Michael Norton, Daniel Mochon, and Dan Ariely examined whether they could provide more concrete evidence supporting the IKEA effect.   In other words, do people value  things that they have created for themselves more highly than if others created it for them?   The scholars conducted a series of experimental studies.   For instance, in one experiment, subjects bid on IKEA items that they had either built themselves or simply examined.   The subjects bid over 60% more for the items that they had constructed themselves.  

The results have interesting implications for many brick-and-mortar retailers in my view.  Many of these retailers face the serious threat of losing sales to internet firms.  Could the brick-and-mortar retailers retain more customers by making their shopping experience more interactive and engaging, including the use of mas customization techniques?  Many have argued that they could.  Now we have another reason why an interactive shopping experience could yield better results.  If that interactivity involves "constructing" one's own product, perhaps through a customization experience, then retailers may increase buyer willingness-to-pay.    Customization, then, may have multiple benefits.   From IKEA to Build-a-Bear, we have plenty of examples that support this notion. 

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Do Customers Prefer Products with Small Flaws?

The Ideas section of the Wall Street Journal Weekend Edition reported on an interesting new consumer behavior study.    The scholars (Danit Ein-Gar, Baba Shiv, and Zakary L. Tormala) examined how people reacted to small flaws in a product. 235 undergraduates participated in this study (ok, so right away, we must acknowledge that one could raise validity concerns based on the sample).   The researchers asked the students if they wanted a chocolate bar.  The students could see, through the wrapper, that some chocolate bars were slightly broken, while others were not.   The researchers intentionally approached some students that were preoccupied, while others were not.   The preoccupied students bought more flawed chocolate bars than perfect ones (by a significant margin).  The non-preoccupied students tended to prefer the perfect chocolate bars. What accounts for these findings?  The scholars argued that the flaw caused the preoccupied students to take notice, to pay attention more closely, and thereby to purchase more chocolate bars.

What's the implication for companies?  I certainly don't think it means that we should intentionally produce flawed products.  However, I do wonder if companies that offer early-stage products might benefit by actively engaging customers and asking them to offer feedback on flaws and potential improvements.  Being very direct about possible flaws, and asking for customers to help, may draw their attention to the product in a crowded, noisy marketplace (i.e. one in which consumers are often preoccupied!). Do you see other implications of this research?  If so, I hope you will post a comment and share your thoughts.

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