Organizing Products with Complements versus Substitutes: Effects on Store Preferences as a Function of Effort and Assortment Perceptions

Journal of Retailing, 91 (1), March, 1-18, 2015

18 Pages Posted: 11 Feb 2015

See all articles by Kristin Diehl

Kristin Diehl

University of Southern California - Marshall School of Business

Erica van Herpen

Wageningen UR

Cait Poynor Lamberton

University of Pennsylvania

Date Written: February 10, 2015

Abstract

Retailers often organize at least part of their assortment by displaying complementary products from different product categories together (e.g., a pair of pants with a shirt) rather than grouping items by product type (e.g., a pair of pants with other pants). However, little is known about how retailers should choose between complement-based and substitute-based organizations. The present paper shows that consumers’ preferences for such store organizations are a function of the effort and assortment perceptions cued by these organizational formats. Holding the underlying assortment constant, complement-based organizations are always more effortful than substitute-based organizations. This difference in effort can create downward pressure on complement-based store choice. Moreover, the effects of organization format on assortment perception depend on whether consumers hold a hedonic or utilitarian focus. When consumers have a highly hedonic focus, complement-based based stores create more positive assortment perceptions than substitute-based stores. Such positive assortment perceptions can, in turn, raise complement-based store choice. However, as consumers’ utilitarian focus increases, substitute-based assortments are seen as both easier and more attractive, leading to a strong advantage in store choice. Our findings provide actionable guidance for retailers considering various store organizations and suggest opportunities for future research.

Keywords: Assortment organization, decision effort, substitutes, complements, hedonic, utilitarian

JEL Classification: M31, L81, D12

Suggested Citation

Diehl, Kristin and van Herpen, Erica and Lamberton, Cait Poynor, Organizing Products with Complements versus Substitutes: Effects on Store Preferences as a Function of Effort and Assortment Perceptions (February 10, 2015). Journal of Retailing, 91 (1), March, 1-18, 2015. Available at SSRN: https://ssrn.com/abstract=2562805

Kristin Diehl (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Erica Van Herpen

Wageningen UR ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

Cait Poynor Lamberton

University of Pennsylvania ( email )

Marketing Department
Philadelphia, PA
United States

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