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Benefits vs. Features

How you display products may make a difference

Posted by Val Srinivas, research leader, Deloitte Services LP, on July 2, 2013

I recently came across a paper from the Journal of Consumer Research, which found that “retail choice architecture” (i.e., how products are displayed on store shelves or websites) influences consumer choice in some interesting ways.1

The study concluded that when consumers are faced with a choice among products organized by benefits, such as picture quality in the case of cameras, they select the cheaper items. Yet, when products are shown according to their features, like megapixels or optical zoom, consumers don’t necessarily gravitate towards the less-expensive options.

Apparently, individuals use different choice criteria in benefit- vs. feature-based settings. When products are displayed by the benefit they confer, consumers perceive greater similarity among items promising the same benefit and use price as one of the main criteria in making their choice. However, when these same products are exhibited by their features, they are seen as less similar, and there is less focus on price.

At first, this struck me as somewhat counterintuitive… But as I reflected, it seemed to make more sense once considering the often-puzzling nature of consumer choice. I suppose this is why consumer behavior is so intriguing. 

Both benefit- and feature-based choice architectures are common in many retail shopping environments – bricks-and-mortar and online.

Let’s say you are shopping for toothpaste in your friendly neighborhood store. The first thing you will notice is that items with the same brand name are displayed together. This sort of product assortment is typical in most retail settings. But the more interesting aspect you might observe is that toothpastes promising the same benefit (e.g.,teeth whitening or cavity protection) are also shown next to each other. 

But in other situations, as when shopping for a digital camera online, you might be presented with options organized by features such as megapixels or shutter speed. This feature-based approach seems rather common for most consumer electronics.

So what can this benefit- vs. feature-based architecture mean for financial services? Looking at some consumer financial websites, I noted some interesting approaches.

For instance, on one bank website, credit card options were presented according to the main benefit offered: cash-back on purchase, establish a strong credit rating, or faster rewards. While on the website of another institution, various types of credit cards were shown by product features, such as annual fee, balance transfer, APR, and so on.

In applying the findings of the aforementioned study to these two credit card examples, we might conclude that the feature-based architecture (the second example) would have provoked less price comparison ─ an outcome not unlike most marketers’ wish, perhaps.

As I continued browsing, I discovered that financial products are generally presented using a feature-based architecture. Many mutual fund websites typically show funds along the risk-return spectrum or by asset class. However, there were other examples, such as home insurance, which employed the benefit-based approach also in showcasing their products.

So what is the main takeaway here? Should financial products be shown by the benefits they offer or grouped by product features?

Speaking as a consumer, I think I would prefer to see products organized by benefits as the primary layer. Now whether this benefit-based choice architecture increases price sensitivity is something to consider, of course.

But the bigger message for me here is that financial marketers may not be paying enough attention to the design of retail choice architecture ─ how products are displayed, organized, and described on websites and in other information spaces.

Insights into consumer psychology and decision-making have expanded rapidly over the last decade or so. The consumer financial services industry may benefit from learning and applying this new knowledge to design better product information spaces. The source for such inspiration might be closer to home than one might think! 

1Cait Poynor Lamerton and Kristin Diehl, “Retail Choice Architecture: The Effects of Benefit and Attribute-Based Assortment Organization on Consumer Perceptions and Choice,” Journal of Consumer Research, October 2013.

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