"This research examines consumer choice as a decision process that comprises two different stages: selecting an assortment and, subsequently, selecting a particular option from that assortment," explains Alexander Chernev (Northwestern University).
Chernev argues that two conflicting goals are in play when we shop: maximal flexibility and minimal decision complexity. When choosing where to shop, we tend to opt for maximal flexibility, preferring to have a large assortment of options. However, when test subjects were asked to focus on the idea that a larger number of options – say, at a Wal-Mart – would make the final decision of what to purchase more complicated, they tended to revise their original choice and go for a smaller, less varied assortment.
Moreover, there is an additional danger to offering too many options, even if it does draw people into the store. As Chernev explains: "…increasing the size of the assortment tends to complicate the decision process and decrease the overall probability of purchase".
Alexander Chernev. "Decision Focus and Consumer Choice among Assortments" Journal of Consumer Research. June 2006.
Journal
Journal of Consumer Research