Guided selling
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✂️ Why fewer products increase conversion and lower returns

Written by
Simon van Duivenvoorde
Published on

The e-commerce dogma tells us that a wide range of products is good: that way, consumers never miss out. But what if we say that this large offer is precisely the explanation for poor conversion? That a large product range is not the solution, but rather the problem?

Eighty percent of the turnover of web shops comes from “only” twenty percent of the product catalog. The bestsellers, the toppers, the “most sold” and “most popular” stamps. The other eighty percent is the immense long tail of the total product range (all of this is also known as the Pareto principle mentioned). These are the products that only come out in very specific cases for very specific customers.

Nevertheless, all customers anytime facing these types of search results:

If you are looking for a camera on Amazon, the counter above greets you. Also has no less than 35,042 cameras and even specialist camera stores quickly sell over 1,000 products. And confronting that huge range is a problem — for the customer and for the webshop. Why?

Choosing not to choose

In the ideal world, the choice is huge. Thirty flavors of ice cream is better than two flavors. At least, that's the assumption. But in reality, having more and more options actually means delaying a choice. This is evident from frequent research (read, for example) The Art of Choosing whether The Paradox of Choice).

For example, there is a well-known experiment in which people are allowed to taste jam in a supermarket. First, there are 24 flavors to taste, later 'only' 6. What does it turn out? Offering 24 flavors works very well to tempt people to try: 60% of store visitors want to snack. This is in contrast to the limited range of 6 flavors: then only 40% of the store visit wants to taste.

But which customers actually bought a jar of jam? Among the large product range - 24 flavors - only 3% of the visitors bought ('coincidentally' also the average e-commerce conversion rate for years!) a jar of jam. Among the smaller product range, 30% (!) increased take a game home. The small product range therefore causes almost 7 times as much sales here than the large product range.

So, at first, having many options seems very attractive, but the opposite is true. With an explosively increased number of choices in the online product catalog, customers “paralyze” and do not convert. They choose not to choose.

But there is more to it than just the stress of choice.

Many products = higher returns

Because if we do manage to choose in a world full of choices, we are never completely satisfied with our choice. Even when there is absolutely nothing wrong with the choice. There are four reasons for this:

1. Regret

If your chosen product isn't perfect, it's easy to imagine another scenario where that might be the case. Namely with a different choice. So you're more likely to regret your purchase.

2. #FOMO

When there are many alternatives, it's easy to stare to death at the shiny features of the products you didn't choose. Opting for one thing (e.g. mango ice cream) also means not choosing the other (e.g. chocolate/mint ice cream). It's a classic case of fear of missing out: FOMO.

3. Increased expectations

With a large number of options, expectations about the outcome increase. And because of this, you can't help but be less satisfied with the result. The key to a happy life is low expectations!

4. Own fault, big bump

An unfortunate choice in a world with little options are not your fault. When you're asked, “why aren't you happy with your choice?” , then an easy explanation is: “well, they only had smurf ice cream.” However, with many options, there is only one culprit: yourself. There were plenty of alternatives, but you made the wrong choice.

So when you have more to choose from, it's inevitable that you also have more to lose. As a result, customers are less likely to be satisfied with the purchase of their products. This is reflected in higher returns and a lower customer rating.

Fewer choices = more sales

Many online stores think they distinguish themselves in terms of the quantity of the product range. “We offer more products than the competition.” In itself, this is a logical idea, because with such an extensive range, you can be sure that you can help 110 percent of all possible customers — and customers can count on always having a suitable product. Chapeau!

But... how convenient it really is to all sending visitors to your store into such a huge product warehouse? So even the people who don't know exactly what they're looking for? Well, not so handy. Because for the average visitor, the wide range leads to stress, procrastination and dissatisfaction.

Simplifying the range of options, on the other hand, leads to better results. There are tip-lists and best-selling sorting options for a reason. Customers who do see the forest for the trees will buy sooner and better. Better? Yes, because imagine what happens to the return numbers when customers buy the right product more often.

So help your customer buy! Limit the number of choices and show a small product range that is relevant to that specific customer. For example, by integrating a decision aid. Or maybe by temporarily removing 80% of your products from the range and seeing what happens to your conversion ;-)

This blog is adapted from a chapter that previously appeared in our book: Customers who are unsure don't buy. About why e-commerce is broken and why 'advice' is the missing puzzle piece in the e-commerce landscape. Both theory and practice are discussed because six leading Dutch brands (e.g. Bever, Swiss Sense and Mediamarkt) share their lessons. #leestip!

Do you want your customers to be able to choose without stress and with ease? Then check our decision aid software with which you take customers by the hand in their search for the right product.

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