Retail Marketing and Choice Architecture - Medallion Retail
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Strategy, Creativity, Shopper Moments, Transformation

Retail Marketing and Choice Architecture

POSTED ON: 10/11/16 Retail Choice Architecture

I am trying to buy a good camera. I say trying because the quest has been going in circles for the last six months.

A round of searching usually goes like this: I get a recommendation from a photographer friend I trust and respect. Then, I go online to learn all about the recommended unit. Next is a trip to the physical store so that I can fondle the camera. But I don’t buy. Not yet. Because another trip online is required, this time to compare the camera I have visited in the store to other, similar products by other brands. I dig and search and study and compare ten, twenty, twenty-five cameras.

Then I put the brakes on the whole thing because I am overwhelmed by choices and I have forgotten exactly what I was seeking in the first place. I am suffering with what is called the Tyranny of Choice (or as psychologist Barry Schwartz identifies it, the Paradox of Choice). So I called in the experts.

I pulled out my dog-eared copy of Richard H. Thaler and Cass R. Sunstein’s book Nudge, a seminal work that describes the impact of small influences or “nudges” on one’s choices and behavior created by environment or circumstance. While the book focuses on public policy, I believe the theories it espouses also have relevance to marketing.

The authors contend that specific environments (a store shelf, an online form, a screen full of products) utilize “choice architecture.” Choice architecture is the way a given system is set up to encourage certain actions over others. For example, it makes a big difference if a check box question asks you if you want to opt out of a company pension plan instead of asking you to opt in. Inertia means many people don’t tick the box, and therefore, more people get the benefits of employer contributions if the default choice is to opt in. The authors point out that leaving existing choice architecture alone impacts behavior just as much as making an active decision to influence it. So why not choose to encourage a more positive outcome?

Marketing is all about influencing choice architecture. One only has to think of the science of retail and how the seemingly unimportant positioning of products on shelves can make a huge difference to sales. It is easy to get queasy about this aspect of marketing. It conjures up all sorts of negative connotations of subliminal messaging, manipulation and overly pushy sales techniques.

But a responsible and sensible consideration of choice architecture by marketers can be of great use to shoppers faced with choice overload. Most of us have busy lives, are time and attention poor and have just enough knowledge to be dangerous. Don’t get me wrong; choice can make a shopper feel in control. Too much choice, however, can be paralyzing and distressing. Distress does not a great Shopper Moment make.

The principle of proactively managing choice architecture is just as valid for marketing as for public policy. Shoppers need help making choices. Good marketing should help them make informed decisions that they feel happy about.

Choice architecture can be deceptively simple. One classic example of a nudge involves an airport administrator who painted a small fly inside each urinal in the men’s bathrooms to encourage accuracy (and, in turn, reduce the cleaning bill).

My point (besides boys will be boys) is that details matter, and even the smallest of nudges can help the shopper feel more at ease, smarter, more empowered and in control of her brand interactions.

Failing to think through the specifics of exactly how a choice system will impact a shopper can mean the difference between brand success and failure. Especially in our current hyper-connected, always-on, information laden shopping environments.

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