Understanding Consumer Reactions to Assortment Unavailability

Furthermore, assortment is a major cost driver for retailers. Therefore, managers must
achieve a balance between an efficient assortment and an assortment that provides the necessary
levels of variety. This balance is graphically depicted in Figure 1.1. In general, adding items to
an assortment will lead to higher assortment benefits (e.g., category sales, perceived assortment
variety), as demonstrated by areas A and B1 in Figure 1.1. However, after a certain point (B2),
adding more items to an assortment can have a negative impact on assortment benefits; for
example, as an assortment gets too “crowded,” consumers may find it more difficult to choose or
be unable to find their preferred item.
Figure 1.1: Hypothetical relation among assortment benefits, assortment costs and number
Assortment
benefits
of items
A B1 B2 X 1
Number of items
Should retailers continue adding items until the assortment benefit curve reaches its maximum
level? The answer to that question depends on the costs associated with adding to the assortment.
Adding items usually adds costs in the supply chain (see cost curve in Figure 1.1) that might
even be progressive, because the last added items will probably consist of slow-moving items.
Therefore, from a business perspective, an assortment that is less optimal in terms of its
assortment benefits might be preferable. Research on the effect of assortment reductions on
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X 2
Cost curve
Benefit curve