While more Attracts, Less Sells
A simple but provocative idea was presented at the Shop.org Summit in October by a social sciences professor from Swarthmore College. The thesis of Barry Schwartz's latest book The Paradox of Choice, is that when presented with too much choice, consumers become paralyzed to such an extent that it lowers sales and hurts customer satisfaction.

To demonstrate his findings Schwartz described testing by a grocery store that was promoting an English Jam. During the first part of the experiment they set 24 jams on a table at the front of the store, for the second half only 6 jams were displayed. The result was that twice as many visitors came to the table with 24 jams; however there were 10 times the sales when only 6 jams were on display. He concludes that a big selection attracts more visitors, while a more limited selection converts more sales.

It seems too much choice also leads to less satisfaction. When consumers are presented with more options than they can possibly investigate, any selection they make comes with the suspicion that alternatives exist that could have turned out better. This leads to regret that they may have made a poor decision, even if they made the best possible selection.

Certainly the goal of your store is to attract new customers and to sell to returning ones. Indeed this challenge is especially true online where it is rare that an ecommerce site can identify more than 30% of its traffic as returning customers. In support of retailer websites, part of our work at Beverage Media is to distribute their inventory to search engines and shopping comparison sites. This attracts traffic from customers that are looking specifically for products the store has in-stock. Clearly having more items on your website means there are more opportunities to pick up traffic from product searches at these referring sites. To take advantage of this traffic some stores are using Virtual Inventory as bait!

Once the visitor is on your site you want keep them and convert the sale by presenting everything your prospect could possibly want. But how do you do this without confusing existing customers? Try researching how your customers behave online, then fine-tune the navigation and search tools around choices that will help your main customer groups. Your best customers should be able to do very little to find whatever they are looking for.

If new customers arrive directly on your product pages from referring sites, then you need to pay attention to "bounce rates" on these pages. A bounce is when someone arrives on a page then leaves immediately for another site. To minimize bounces try adding links on the product page so they can navigate to similar products in your inventory.
How are returning customers using the site? They might be following links in your emails or searching for your homepage. If so, your homepage and the email landing pages should be designed to minimize confusing decisions. Think "6 Jams" for these pages; however each page can have a different targeted selection.

By understanding your customer's goals and being clear about how they can get the best value from your website you will provide a better shopping experience. Make it easy for them to feel that they have made good choices and you will have more satisfied customers.