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Inside the Secret World of Trader Joe’s

Trader Joe’s does a lot of things right. They tell stories about their products — they don’t sell olives they sell rare Greek olives. They don’t sell virgin olive oil they sell hand-picked, organic, Tuscan virgin olive oil. But they do more than just tell stories about products, they intentionally limit selection:

Swapping selection for value turns out not to be much of a tradeoff. Customers may think they want variety, but in reality too many options can lead to shopping paralysis. “People are worried they’ll regret the choice they made,” says Barry Schwartz, a Swarthmore professor and author of The Paradox of Choice: Why More Is Less and more recently, Practical Wisdom.

“People don’t want to feel they made a mistake.” Studies have found that buyers enjoy purchases more if they know the pool of options isn’t quite so large. Trader Joe’s organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won’t increase the chances they’ll buy. (It also explains why so often people are on their cellphones at the supermarket asking their significant other which detergent to get.) “It takes them out of the purchasing process and puts them into a decision-making process,” explains Stew Leonard Jr., CEO of grocer Stew Leonard’s, which also subscribes to the “less is more” mantra.

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Barry Schwartz is the author of The Paradox of Choice: Why More Is Less and more recently, Practical Wisdom.