Optimal Assortment Size: From 3% to 30% Conversion on the Shop Floor and in Your Webshop

How many hours per year do you actually spend scrolling through Netflix, instead of actually watching something?

To be honest, I lose an exceptionally large number of minutes (or even hours). You open the app, scroll through endless rows of mediocre content, and before you know it you're an hour further and you've... watched absolutely nothing. Time's up. The evening is over, and you haven't seen a single episode or film.

It turns out I'm not the only one. In fact: the average American spends no less than 80 to 110 hours per year searching for content on streaming platforms. In that time, you could have watched forty feature films. Forty!

And this is only getting worse. This data is from 2019, and by now it's - probably - become even more dramatic. But why does this actually happen? And more importantly for you as a marketer or retailer: what on earth does this have to do with your assortment?

The Netflix paradox: how 110 hours of viewing time is lost to scrolling

The answer lies in a fascinating psychological phenomenon that reaches far beyond just your Netflix evening. Because yes, you'd expect that more choice makes people happy, right? More options means more possibilities to find exactly what you're looking for. Rationally speaking, that sounds logical.

Except... our brain doesn't work as rationally as we'd like to think.

What actually happens is that we literally become paralyzed when faced with too many options. We can no longer make a decision. And the strange thing is: this plays out everywhere around us. On Netflix, on Tinder, in the supermarket, in your webshop, and yes, even at that order terminal in the restaurant where you suddenly have to process thirty burgers on one screen.

Rejection mindset: why more options make you more critical

This is where it gets really interesting for your brand. Because it's not just about the fact that people become overwhelmed by too much choice. Something much more important is at play: the rejection mindset.

Research into Tinder behavior by two Dutch researchers demonstrates this crystal clear. As you keep swiping longer and have swiped away more options, you become significantly more critical. The chance that you accept a profile at the end of your swiping session is no less than 27% lower than at the beginning. Within five minutes, you've shifted from an open, curious mindset to a hypercritical evaluator.

And this is crucial: purely having many options changes the way we evaluate those options. We literally become more critical because of it.

The paradox of choice: the jam experiment that explains everything

Now you might be thinking: nice story about Netflix and Tinder, but what does this mean concretely for my brand? That's where Barry Schwartz's classic jam experiment comes in.

In an American supermarket, they conducted a brilliantly simple experiment. They created two situations with a selection of jams. In one situation, there were 24 different flavors, colors and varieties. In the other situation: just 6 options.

And what turned out? With the 24 options, more people were indeed attracted. You'd say: great, more traffic to your aisle! Except... here comes the paradox. Only 3% of people actually bought a jar of jam when there were 24 options.

With 6 options? A conversion rate of 30%.

Let that sink in for a moment. Ten times as much conversion by offering less choice. In absolute numbers, the display with 6 jams simply sold more than the one with 24 options. People were not only attracted and tempted to buy, they also weren't paralyzed by too much choice.

That's the paradox of choice in a nutshell: a large offering attracts people, but fewer people ultimately buy.

From theory to practice: what this means for retailers

Okay, so we now know that too much choice paralyzes people and makes them more critical. But does this mean you should halve your entire assortment tomorrow? Not necessarily.

There's an important nuance. Sometimes more choice does work well, but then you need to meet a specific condition: your consumer must be well-educated and aware of all the choices available.

Think of a platform like Coolblue. If someone is simply looking for "a Mac," you want to give that person relatively few options. But someone who is knowledgeable, who knows exactly which specs they need for video production or software development? They want more options to choose from.

Online you can filter this relatively easily with filters and product finders. In a physical supermarket, this is much more difficult. And that's also why this topic is so crucial for retailers: you need to understand where your customer stands in terms of knowledge and involvement with the product category.

But it goes beyond just the number of options. Because the question isn't only "how many products should we have," but also "how do we present them so people don't become overwhelmed?" And that's where shelf layout comes into play. How do you ensure your assortment is organized in a brain-friendly way?

This is also where the relationship between assortment size and brand awareness becomes interesting. Because where your brand currently stands in terms of awareness and market share influences how many options people can ideally handle from your brand. A strong brand with high awareness can handle more SKUs without losing people. A newcomer? They should focus on fewer, but more powerful options.

Want to know more about shelf layout and brain-friendly choices? Watch the full webinar

This blog gives you an initial insight into the paradox of choice and why more isn't always better. But there's so much more to discover. In the full webinar, we dive deeper into:

• The optimal assortment size for category growth: when does assortment expansion work and when doesn't it? (And this turns out to be predictable!)
• The impact on brand performance: how does assortment size affect your market share and penetration?
• Practical tips for large assortments without choice stress: how do you apply psychology cleverly so you can offer a wide range without losing people?

Sign up to watch the recording, including all slides and key insights as a download. Because let's be honest: you don't want to spend 80 hours optimizing your assortment. You just want to know what works.

Watch the full webinar here →