Business Strategies
The Paradox of Choice
June 2, 2020

Most businesses regularly introduce line extensions to their products to give consumers more choice, with the hope they’ll buy their product more often.  In packaged goods, another part of the strategy is to expand retailer shelf space to increase visibility.

Unfortunately, while more choices may take more shelf space, there’s not only a point of diminishing returns, but too many choices may also cause consumers to purchase less overall.  Several academic studies have shown that while the concept of more choice is appealing, the reality is that too much choice complicates decision-making and risks consumers simply moving on.

As you consider expanding your brand, assess the incremental value of additional products.  Are your resources better invested in improving or promoting your core products?  Or does your expansion truly give non-users a new reason to buy or current-users new reasons to buy more?  Finding the optimal point is tricky, but doing so can drive both sales and operational efficiency.