Help or hinder? When recommendation signage expands consideration sets and heightens decision difficulty

Abstract

This research examines whether recommendation signage helps or hinders the consumer when faced with choosing from large product assortments. In spite of frequent usage and retailer intuition suggesting that providing recommendation signs (e.g., “Best Seller,” “Award Winner”) should help consumers in the choice process, we propose that signs can hinder choice for consumers with more developed preferences by adding to the complexity and difficulty of the decision process. In three experiments using horizontally differentiated products in multiple categories, we provide evidence that recommendation signs create preference conflict for consumers with more developed preferences, leading these consumers to form larger consideration sets and ultimately experience more difficulty from the decision-making process. In addition, we show that these effects are mitigated for consumers with less developed preferences and when the choice is from a small assortment. The results suggest that recommendation signage may not be an effective tool for aiding choice from large assortments; instead signage can exacerbate the difficulties associated with having too many choices, with implications on purchase quantity.