Smart Subcategories: How Assortment Formats Influence Consumer Learning and Satisfaction

Abstract

We show that formats used by retailers to organize assortments into subcategories can enhance or encumber consumers’ learning and satisfaction. For more knowledgeable consumers, unexpected subcategory formats provide a newness cue, thereby increasing effort, learning, and satisfaction. That is, unexpected subcategory formats help more knowledgeable consumers overcome complacency and benefit more from their shopping experience. Conversely, unexpected subcategory formats lead to decreases in learning and satisfaction among lower prior knowledge consumers. Interestingly, we also find that consumers are relatively well calibrated with regard to the effects of more and less expected subcategory formats, anticipating that less expected formats may help more knowledgeable consumers. Taken together, these findings suggest that subcategory formats can be tailored to consumers’ prior knowledge levels in ways that yield both expected and actual benefits.