Friday 20 March 2015

The Paradox of Choice - Why more is less by Barry Schwartz

Recently I have been reading this book (Amazon link).

My understanding of what he is saying is that in our consumer society, we are dazzled (my word) by the alternative choices that are available to us.

If you go into your local supermarket and want salad dressing you can have oil and vinegar or french dressing or Caesar dressing or ... not only do you have tens of different sorts, you also have different manufacturers offerings and then the supermarkets offerings (economy, normal and luxury) and then different quantities for the same type. That is for just one item on your shopping list!

Schwartz suggests that there are several types of shopper and their experiences are different:
  • Maximisers 
    • Make more comparisons;
    • Take longer to choose;
    • Have 'buyer remorse' after purchase;
    • Are less positive about their buying decision;
  • Satisfiers
    •  If it is good enough, buy it.
    • Rationale - it might be cheaper else where, but it might be out of stock and I then have to come back here any way and purchase it.

He has done a lot of research identifying which type a particular purchaser is, based on their response to a number of statements which they score. The types are similar to a glass half empty or a glass half full purchaser!

Obviously in the UK there are organisations (such as Which?) which help us to make our choices in a more rational manner. They do this in an impartial way as they are not supported by retailers or manufacturers. They have best value items and they are not afraid to slate items which are of a poor quality or reliability or worst value of the items tested. Another useful organisation is Money Saving Expert. This does not 'test' items but advises by newsletter of good deals in a large variety of sectors. They also have forums for customers to 'complain about' or 'praise' a particular supplier. They also have a useful sub site which alerts you to the fact that you may be able to save a threshold set amount of money on your energy bills by switching suppliers. In addition there is a forum for people to comment on each of these suppliers.

I read somewhere that once I have chosen the washing machine of my choice and I go to a price comparison website, most people do not chose the cheapest one, because of suspicions that it is too good to be true. In fact the article was suggesting that retailers try not to be the cheapest! (Google results for price comparison psychology).

The other problem is that often while you have put in the model number of the machine of your choice (to ensure that you do not get distracted by offers on other machines), there may need to be VAT added or there is a delivery charge (often this is not clear until you reach checkout), while the slightly more expensive supplier has free delivery and fixing or has a longer guarantee period or they will take away the old one free. 

Are you a Maximiser or Satisfier?