More than half of the top U.S. retailers use signs such as “Best Seller” or “Award Winner” as a way to simplify choice for consumers. It turns out, however, that these signs can have the opposite effect by making decisions more difficult, especially when shoppers are faced with a large assortment of products and have a well-developed preference for a particular item.
It’s a paradox: Customers want more choices and a better selection, but the more options that are available, the harder it can be to make a decision. Retailers have attempted to simplify the process for shoppers by using what’s known as recommendation signage. From “Top-Rated” to “Employee Favorite,” these signs are intended to offer guidance and make it easier to choose.
But do they really?
New research by McCombs faculty Susan Broniarczyk and Leigh McAlister, along with co-authors Joseph Goodman from Washington University and Jill Griffin from the University of Evansville, has found that instead of helping shoppers select a product quickly and easily, recommendation signs can actually exacerbate the difficulty of making a decision — particularly if you already think you know what you want.
Perhaps you’re walking through the wine aisles of your favorite store knowing you’d like a Chianti Classico that costs no more than $15, and you happen to see an “Award Winner” sign next to one in your price range. You’re likely to grab it and check out. That sign confirmed your preferences and helped justify your selection.
On the other hand, were you to walk down the Italian wine aisle and the “Award Winner” sign was on a similarly priced red wine you’d never heard of, you would now be more likely to consider this different product and the other wines like it. Your consideration set — the number of wines you’re comparing — has grown, which can cause greater uncertainty and make the decision process much more difficult and time-consuming.
As Broniarczyk explains, “Our research shows that an inconsistency between one’s preconceived preferences and a recommended option creates conflict for consumers, leading them to reexamine their decision.” This conflict leads to second-guessing. You’re now more likely to consider other wines with similar attributes as the “Award Winner” even if you had a clear idea of what you wanted to buy at the outset.
Interestingly, if the selection is small to begin with, Broniarczyk and McAlister found that the presence of a recommendation sign — even if it would otherwise create conflict for the shopper — does not increase decision-making time or decision difficulty.
In another experiment, participants were asked to purchase Godiva chocolates. When there were only six types of chocolates to choose from, participants made their selections with the same, low level of difficulty, whether there was a sign or not. However, for participants who had to consider 30 different types of chocolate, decision difficulty increased significantly — particularly if a recommendation sign caused high conflict for the shopper, meaning the sign was on a highly attractive, compelling chocolate as determined by an experiment pretest.
“With small product assortments, the choice set is manageable, and most good options will receive consideration regardless of the signage,” says Broniarczyk.
When there are many options available, however, recommendation signs can have the opposite effect than intended: They can make it harder to make a decision, especially if that sign is on an item that causes the shopper to reconsider her original preference.
Contrary to conventional wisdom, recommendation signs can actually make it harder for a shopper to make a decision — but this isn’t necessarily bad for retailers.
“We focused on horizontally differentiated categories, such as food, beverages, and clothing, where there is no universal optimal choice. Often, these categories are relatively inexpensive, discretionary purchases,” says Broniarczyk. “The expansion of consideration sets may increase the likelihood that consumers will purchase multiple options if financially able.”
When experiment participants were instructed to “buy at least one” of a certain item, shoppers were about 30 percent more likely to purchase more than one product if a sign was present.
Future research might also examine how recommendation signs, coupled with price discounts, affect a consumer’s consideration set and decision-making process.
Another interesting avenue for research is whether recommendation signage has a differential effect when placed on the main category shelf versus if the recommended product is featured in isolation in a special display, such as an end-cap.
Broniarczyk says that these well-intentioned recommendations can inadvertently complicate consumers’ decisions, so careful placement may be key.