Avoiding Choice Paralysis: How to Profitably Manage a Large Product Catalogue

Choice is good, right? The more product lines we list on our online stores, the more options we give our visitors, then the greater the likelihood that visitors will buy something and our conversion rates will improve. Yes? Well, not necessarily.

Adding more product lines to an ecommerce store should deliver increased customer satisfaction and increased sales for you but there are pitfalls of managing a large product catalogue. I'll take a look at the benefits of a large product range, some of the questions you should be asking yourself and then share proven ways you can support your product range to provide the greatest chance of success.

The Benefits of Ranging More Products

Increasing the size of your product catalogue is not the answer for every company. However, there are commercial opportunities available, a few of which being:

  • To cater for consumers' individual needs and wants. Variations in colour, size and price are common to many products. So, increasing your product range to cater for these basic consumer needs makes sense.
  • To achieve greater visibility in search results. Potential customers often search for a specific product in search engines; and if you range more product, there's greater opportunity you'll appear in search results.
  • To improve the credibility of your store. You may choose to build a brand renowned for stocking the widest range of a specific product type. This gives the customer reassurance they do not need to shop around to compare.
  • To expand your range into a new category, or subset within an existing category. Here, we're looking at adding new products to an existing category. Entering new markets is a subject for another day.

Unfortunately, there is no magic number at which it becomes very difficult for a customer to make a decision.

But when you continue to add more products, and find yourself with 150+ formal white shirts in your range, the choice becomes overwhelming, e.g. houseoffraser.co.uk. As a customer, we want to choose the best product to fit our needs, and finding "the one" amongst 150 requires more effort than a choice between three comparable products.

In this situation, being able to help the customer narrow down their search will help them progress through the purchase funnel. Ok, 150 comparable products is an extreme, but a customer faced with a range of 10 comparable products may also need some assistance narrowing their search.

Questions You Should Answer

This is not an exhaustive list, but if you do have a large product catalogue or you're considering expanding, then I'd suggest spending some time asking yourself:

  1. Is having a wide range an important strategic positioning message for my business?
  2. How should I prioritise products in each category? For example, high-margin or high stock holding.
  3. Do I have any product lines that are exclusive to the business, or difficult for customers to find?
  4. What will the impact be on sell-through rate? Unless you are working on a 100% drop ship model, you will likely want to ensure that bought stock is not sat in your warehouse for too long.
  5. Am I getting high page views but low conversion for some categories? This could indicate you need to assist the user more at this exit point.

Retailers as Product Curators

It is (relatively) easy to add more products to a store. So, your role as a retailer is increasingly becoming the curator for your chosen industry and for your target customer. Don't try to offer everything to everyone. This may work for marketplaces such as Amazon and Tesco, but you will likely be competing with them. How do you differentiate? What does your brand stand for? Who buys from you? And why do they buy?

A potential customer lands on your category or product listing page direct from a search engine. What do they see? If there are a lot of similar-looking products, then the visitor needs to invest some effort into narrowing the range to the one they will buy. Our job is to help narrow the search, and there are many ways to do this:

  1. Include Featured and/or Recommended items on category and product pages. This is typically in a panel on the side or at the bottom of the page. Either manually selected, or preferable driven by a personalisation algorithm.
  2. Provide filters to help your customers narrow their search. Keep the knowledge level of your customer in mind. Basic filters (size, colour, price) are easy to understand, but ensure all filters can be used effectively by your customers.
  3. Write articles for your blog: You have options here. For example, highlight products in cross-category staff picks or new arrival posts; or curate collections based on colour, trend, end use, or any common theme.
  4. Position key products high on product listing page, to give them greater visibility. These products will receive more click-throughs than those lower down the page.
  5. Featuring new product in marketing channels such email or social will generate return visits to your store. Explain why a product is being added to the range, and how it differs from others already available.
  6. In a physical store, you would typically ask the customer a few questions to help narrow the search. This is not so easy online, but a few retailers are exploring this option. Autotrader ask questions and take you to a traditional list of filters to narrow down from 400,000+ used cars currently available. And there are third parties such as Smart Assistant, used on Very.co.uk to help with mattress selection.
  7. Live chat is frequently used, and can be configured to appear only after the visitor has clicked a defined number of pages, which could indicate they need some assistance. My experience is that customers who interact on live chat have a significantly higher conversion rate.

Combatting choice paralysis is not a new topic. But it is a challenge that an ever-increasing number of retailers are facing today. Maintaining a large product catalogue and even running a dropship operation is achievable using the Magento platform. Though it doesn't mean that everyone should. There are definite commercial benefits to ranging a large number of products, but these benefits may only be realised if you provide appropriate support of your range.

The most recognised work on the subject is the Paradox of Choice from psychologist Barry Schwartz And the excellent usability blog NNGroup has more recently found an offline example where increased choice is not for everyone's benefit.