Consumers often lack the full information when making purchasing decisions about a variety of products, from day-to-day items to luxuries such as holidays, resulting in poor choices, and superior products losing out on sales, a recent study suggests.The problem is exacerbated as consumers are required to put a great deal of time and effort into acquiring the necessary additional information to make the best choice.
“Facing an abundance of product choices, and with only limited time and attention to evaluate, consumers have to quickly come to grips with how much and what type of information to acquire and pay attention to, and what to ignore. They then make purchasing decisions based on partial information, therefore it’s quite possible that consumers routinely make the wrong choices,” said Tamer Boyaci, lead researcher of the study.
To tackle this, a team of researchers devised a model that can help retailers and companies to market their products more effectively, by enabling them to better judge how much and what types of product information to make available to customers. The Consumer Choice Model measured how decisions were made by consumers when given a set of alternative products to consider in their purchasing activities.
The results show that, in instances where similar items were compared and the information costs were lower, consumers preferred to select the item which provided the easiest access to further information, regardless of whether the other product was superior, as they felt more confident with their decision. In instances where hard-to-evaluate products were perceived as less attractive, the model proved that simply improving the provision of information to customers could significantly improve sales.