Business Intelligence

Corralling Consumer Choice: Optimizing Assortment Size Based On Perceived Attractiveness

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Executive Summary

Squeezed by declining sales and tight financing, retail marketers face a difficult dilemma about sizing their selection of merchandise. Large selections may provide a better chance that consumers will find a match with their preferences, which boosts sales potential. But offering smaller selections can reduce retailers' costs - an especially tempting alternative in a budget-cutting environment. So the question arises: is more choice always better? Do consumers prefer a smaller assortment under certain conditions? With ever-increasing choices in categories ranging from TV channels to paint, is there a point at which too many choices can overwhelm a consumer and block decision making entirely? In consumers' decisions about selecting one retailer over another, the effect of assortment size is directly linked to the relative attractiveness of the options.

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