Imagine you are running a furniture store. A young couple who recently moved into their first apartment enters your store.
How should you arrange your assortment?
You can arrange your assortment with similar products ("substitute-based") and group tables, cupboards, closets, beds, and chairs together.
Or, you organize your assortment by your customers' purchase goals ("complement-based") and group your products by "living room," "bedroom," "office," and "kitchen."
What should you do?
How would the customer journey differ for the young couple shopping for furniture?
Researchers conducted a real-life experiment in a grocery store. They arranged the assortment by
- breakfast (e.g., milk, cereal, eggs),
- main course (e.g., produce, fresh meat, canned food),
- baking/dessert (e.g., cake mix, baking powder, chocolate chips),
- snack/candy (e.g., carbonated drinks, chocolate, nuts),
- sandwich/deli (e.g., bakery, cheese, deli meats),
- cleaning supplies (e.g., household cleaning, detergents, dishwashing),
- health/beauty (e.g., shampoo, bar soap, oral care), and
- stockpiling (everything else).
The researchers found that weekly purchases increased by 9% when the assortment was arranged by complements instead of substitutes.
Other examples besides those mentioned above (furniture retailer and grocer) for which a complement-based assortment organization might also work are apparel retailers (instead of "suits", "shirts" and "jackets" organize by "sportswear", "casual", "office", "wedding & parties") or providers of financial services (instead of "loans", "credit cards", "insurance", "investment advice" organize by "just married", "baby born", "freshman at university" or "fresh retiree").
References
Sarantopoulos, P., Theotokis, A., Pramatari, K., & Roggeveen, A. L. (2019). The impact of a complement-based assortment organization on purchases. Journal of Marketing Research, 56(3), 459-478.