The Psychology of Choice Overload: Implications for Retail Financial Services
Imagine for a moment the difference between shopping at Walmart and shopping a high-end boutique on Rodeo Drive or Fifth Avenue. The sounds are different. The employees are different. The prices are certainly different.
In fact, the retail environments couldn’t be much more different, especially in terms of product selection. Whereas an upscale boutique might sell no more than a few dozen different clothes in a narrow range of sizes, Walmart prides itself on stocking hundreds of options in a wide variety of colors and sizes. Despite the different focuses, planners construct each product set deliberately based on the needs of their anticipated customers.
Consumers in North America have many choices. Walmart, the boutiques, and all the stores in between prove that. But sometimes a large number of choices is not what consumers want or need. In recent years, especially since the Internet explosion, retailers and other providers have begun to use the word “curate” to describe the value they provide. It’s not enough to offer lots of choices anymore: Consumers expect you to do some of the hard deciding for them, to make their decisions easier. At credit unions, the product is money management, not fancy duds, but this brief examines why the planning principles are the same. Specifically, it questions the assumption that offering credit union members more choices in the form of ever more products and services is better than offering fewer, more curated choices.