• by Ray Schultz , October 16, 2019

Brands that cram endorsements from influencers into their emails better be careful: Consumers are wary when the product being hyped is being offered in a wide variety, according to a new study by researchers at the University of Texas Dallas and the University of Hong Kong.

The researchers found that 50% of consumers rely on digital influencers and 40% make purchases because of them.

Yet, increasing product varieties in an influencer opinion can drive them away.

“When many types of a product are available, consumers may expect an expert to find a better fit, and this consideration would then reduce consumer expectations of the product quality,” states Chenxi Liao, a professor in the business school at The Chinese University of Hong Kong.

Liao adds that “as a result, the consumer valuation may decrease, which could lead to a lower profit.”

Another risk is that “the opinion leader may just like the product because of its color, which is not relevant to the consumer, instead of liking the product because of its durability,” Liao says. “The firm can adjust the product variety to influence consumers’ quality inference and in turn their purchase decisions to earn a higher profit.” 

The professors conclude that “providing consumers with more choice can lead to reduced consumer welfare.”