Effect of Product Assortment Changes on Customer Retention

This research investigates the impact of large-scale, multiple category assortment reductions on sales at both the store level and the category level simultaneously. Using data provided by an online grocer, we find that the reduction in assortment decreases both shopping frequency and purchase quantity, results in contrast to all of the recent studies on assortment reductions (FMI 1993, Dreze, Hoch, and Purk 1994; Broniarczyk, Hoyer, and McAlister 1998; Boatwright and Nunes 2001, 2004). In addition, we also find that the impact of the assortment cut varies widely by category, with less-frequently purchased categories more adversely affected, suggesting that managers who target cuts in select categories may moderate the overall loss in sales.

Citation:

Kristin Diehl, Cait Poynor, and Peter Boatwright (2005) ,"Effect of Product Assortment Changes on Customer Retention", in E - European Advances in Consumer Research Volume 7, eds. Karin M. Ekstrom and Helene Brembeck, Goteborg, Sweden : Association for Consumer Research, Pages: 605-605.