Imagine you are running a furniture store. A young couple who recently moved in their first apartment enters your store.
How should you arrange your assortment?
You can arrange your assortment by similar products (“substitute-based”) and group together tables, cupboards, closets, beds, and chairs.
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 be different for the young couple shopping for furniture?
Sarantopoulos et al. (2019) conducted a real-life experiment in a grocery store and 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 purchase went up by 9% if the assortment is 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”).
Sarantopoulos, Panagiotis, Aristeidis Theotokis, Katerina Pramatari, Anne L. Roggeveen (2019), Charan K., Neil Bendle, June Cotte (2019), “The impact of a complement-based assortment organization on purchases,” 56(3), 459-478.