An important decision that retailers make involves selecting the number of items to include in their assortments in each product category. This decision involves optimizing the benefits and costs of the assortment size for both buyers and sellers. Thus, from a retailer’s standpoint, smaller assortments are often considered more desirable for cost-related reasons, such as inventory, shelf space, and financing costs. In this context, several retailers have considered trimming their assortments to increase their profit margins. Despite the evident cost savings, this approach has faced resistance from retailers concerned that decreasing assortment size will have a negative impact on consumer attitudes toward the retailer, ultimately leading to lower purchase probability.
The increasing impact of assortment size on retailer costs raises the question of how assortment size influences buyers’ choice of a retailer. Thus, a retailer concerned with creating a cost-efficient assortment might want to know whether reducing the number of items in its assortment will lead to a decline in store attractiveness and lower the likelihood of consumers choosing this store. In the same vein, a retailer concerned with broadening its customer base might want to know whether increasing the assortment size will result in greater store preference. Despite the conceptual and practical importance of understanding the impact of assortment size on consumer choice among retailers, existing research does not offer a clear answer to this question, and it has been argued that larger assortments can be both beneficial and detrimental to consumers.
The authors address the question of how assortment size influences consumer choice among retailers by investigating the impact of attractiveness of the options constituting these assortments on consumer preferences. Retailers vary in terms of the attractiveness of the items they carry. Some retailers carry options that are, on average, of higher quality and thus are likely to be perceived as more attractive. In contrast, other retailers carry options that are, on average, of lower quality and are likely to be perceived as relatively less attractive. In addition, some assortments can be perceived as more attractive because the items they carry match consumer preferences. To illustrate, assortments comprised of best-selling items that are likely to appeal to a majority of buyers are likely to be perceived as more attractive than assortments comprised of less popular items. Likewise, assortments customized to fit the preferences of a particular customer segment are likely to be perceived as more attractive to that segment than assortments designed to appeal to a broader segment.
In this research, the authors show that smaller assortments will be more preferred when choosing among assortments that comprise relatively more attractive options. They further document that the relationship between assortment size and option attractiveness is concave, with the marginal impact of assortment size on choice decreasing as the attractiveness of the options increases. They also demonstrate that consumer assortment preferences are a function of the perceived benefits and costs associated with the available assortments, such that the hypothesized assortment-attractiveness effect is more pronounced when the perceived costs of choosing from the larger assortment are high rather than low. The theorizing is supported by the data from eight empirical studies, which offer converging evidence in support of the predictions.
Biography
Alexander Chernev is Associate Professor of Marketing in the Kellogg School of Management at Northwestern University. He holds a PhD in Psychology from Sofia University and a PhD in Business Administration from Duke University. Professor Chernev’s research applies theories and concepts related to consumer behavior and managerial decision making to develop successful marketing strategies. His research has been published in leading marketing journals, such as Journal of Consumer Research, Journal of Marketing Research, Journal of Consumer Research, and Journal of Personality and Social Psychology. Professor Chernev serves on the editorial boards of Journal of Consumer Research, Journal of Marketing Research, Journal of Marketing, Journal of Consumer Psychology, and International Journal of Research in Marketing, and he has advised numerous companies on issues of strategic marketing planning and analysis, new product development, and customer management policies.
Ryan Hamilton is Assistant Professor of Marketing in the Goizueta Business School at Emory University. He holds a PhD in Marketing from Northwestern University and a BS in Applied Physics from Brigham Young University. Professor Hamilton’s work has previously been published in Journal of Consumer Research and The Social Psychology of Consumer Behavior. His research interests include judgment and decision making, consumer choice, and information processing.
J Marketing Research, Volume 46, Number 3, June 2009
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