The Effect of Product Assortment Changes on Customer Retention
Sharad Borle and colleagues, including the authors of the 2001 study, return to household records from the same online grocer, this time for every category in the store. Their model estimates the effect of an assortment change at the store level and the category level together. Households offered the reduced range were expected to order less often and to spend less per order than households that kept the full range, with the fall in how often they ordered costing more than the fall in order size. Categories bought less often lost the most, and staples lost the least. The authors explain the gap with the 2001 result by the earlier analysis using a subset of categories and households that leaned towards frequently bought staples. The study covers one city, one delivery fee and existing customers only.
Sharad Borle and colleagues, including the authors of the 2001 study, return to household records from the same online grocer, this time for every category in the store. Their model estimates the effect of an assortment change at the store level and the category level together. Households offered the reduced range were expected to order less often and to spend less per order than households that kept the full range, with the fall in how often they ordered costing more than the fall in order size. Categories bought less often lost the most, and staples lost the least. The authors explain the gap with the 2001 result by the earlier analysis using a subset of categories and households that leaned towards frequently bought staples. The study covers one city, one delivery fee and existing customers only.
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Borle, S., Boatwright, P., Kadane, J. B., Nunes, J. C., & Shmueli, G. (2005). The Effect of Product Assortment Changes on Customer Retention. Marketing Science, 24(4), 616-622. doi:10.1287/mksc.1050.0121