Bad neighbours may be other categories

Posted by Oliver Koll on Nov 15, 2016

assortmentConsumers are often confronted with product categories within a fixed space (e.g. freezer or check-out) that are not connected with their planned purchase. For example, the checkout might have sweets, magazines and digital music vouchers to increase shoppers’ impulse buying. The variety offered in adjacent product categories like this, impacts buying in the focus category: consumers are less likely to purchase if the focus category is next to another category with a larger assortment and greater variety. The larger range makes consumers re-allocate short attention spans and distracts from the focal assortment.
Retailers and manufacturers competing in small-range categories (often less frequently purchased product categories) should strive to present this part of the assortment separately to avoid the negative effects of product categories with a greater selection.

Source: Hong, Misra, Vilcassim (2016). The Perils of Category Management: The Effect of Product Assortment on Multi-category Purchase Incidence. Journal of Marketing, 80, 34-52.