With consumers feeling squeezed by rising prices and dealing with too many choices when shopping online, brands are turning to artificial <a href='https://www.murdok.org/archive/venture-county-star-site-shuts-off-comments' target='_blank' rel='follow'>intelligence to help consumers make better decisions.
Rising prices and the paradox of choice
As people try to be smarter with their money, they’re running into another problem: too many choices when shopping online. This is known as the “paradox of choice,” a concept introduced by psychologist Barry Schwartz. While having many options might seem reasonable, it can actually make shopping harder for consumers and less satisfying.
In 2000, psychologists Sheena Iyengar and Mark Lepper conducted a groundbreaking experiment on the paradox of choice. IThey set up two display tables at an upscale grocery store: one with an extensive selection of 24 jam varieties and another with only six jam varieties.
The key findings revealed a counterintuitive consumer behavior pattern. The 24-jam display attracted more initial customer interest. However, the six-jam display resulted in significantly higher actual purchases.
Customers were approximately ten times less likely to buy jam when presented with the 24-flavor selection. This phenomenon, known as choice overload, shows that while more options might seem appealing, they can paralyze decision-making. People are overwhelmed when confronted with too many choices, leading to decision fatigue and ultimately reduced purchasing behavior.
The study challenged the idea that “more choices are always better,” revealing how excess options can demotivate and hinder decisions.
Fast forward to the present, and we face a similar challenge. When consumers search for products online, they might find hundreds or even thousands of options. This can result in the consumer:
- Taking longer to make a decision.
- Giving up on buying because it’s too overwhelming.
- Feeling less happy with purchases.
- Regretting the purchase later.
Dig deeper: 7 marketing strategies to conquer decision paralysis
How AI is helping to narrow choices
AI is helping ecommerce brands simplify and personalize shopping. With the rise of generative AI, businesses are using innovative strategies to attract and retain customers. Key techniques to streamline decision-making and boost purchase rates include:
1. Smarter search results
Companies like Etsy are using AI to show a smaller, better list of products that match the search more accurately. These solutions typically combine semantic search with traditional keyword matching to interpret user queries more effectively. The system continuously learns from user behavior (i.e., clicks, purchases and browsing patterns) to refine and improve search results over time.
2. Image searches
Some AI allows consumers to upload an image and then find that exact item or something similar. eBay uses visual search capabilities to help customers find products. They’ve also included a scan-barcode option on mobile, catering to shoppers looking for exact versions of items at discounted prices or rare, vintage, or luxury goods. Brands must use this feature carefully, as AI can sometimes miss the mark with irrelevant and varied search results.
3. Personal recommendations
By looking at what a consumer has bought or looked at before, AI can suggest products that consumers might like. This is a feature Amazon has built upon for the past two decades.
Amazon states:
“[I]nstead of providing generic product recommendations to customers such as ‘More like this,’ Amazon provides more specific, personalized recommendations such as ‘Gift boxes in time for Mother’s Day’ or ‘Cool deals to improve your curling game’ based on a customer’s shopping activity.”
The future of shopping
AI has the potential to transform shopping by simplifying choices and improving decision-making, but finding the right balance is essential. Retailers must use brands as filters to narrow down overwhelming options while offering consumers enough meaningful choices.
Addressing the challenge of choice overload with thoughtful AI solutions lets shoppers make confident decisions and enjoy a more streamlined shopping experience. Retailers and consumers must stay flexible and open to new approaches, ensuring that shopping in the digital age remains efficient, personalized and enjoyable.
Dig deeper: How to balance customer experience and returns in ecommerce
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