#1149 2008 · Mogilner, Rudnick & Iyengar (Journal of Consumer Research) · Retail assortment strategy
The same products feel like more choice when you separate them behind more category labels
the problem
Retailers assume a richer assortment means stocking more SKUs, but inventory is expensive and wasteful of leftover stock
background
A merchant's sense of how much variety it offers is usually treated as a property of the inventory: more SKUs, more choice. Assortment planning is the business of deciding how many and which products to stock, and any scheme to look richer starts by buying more goods — which costs money, takes shelf and warehouse space, and increases the chance of leftover stock. The researchers set out to test whether perceived variety actually tracks the number of items shoppers can pick from, or something cheaper.
In a field experiment (cell phone stores) and a series of laboratory experiments, they varied the number and content of category labels over the SAME set of items — sometimes grouping options under more headers, sometimes fewer, sometimes letting the headers be nearly empty or semantically meaningless — and measured how many distinct choices shoppers believed they had and how happy they were with the choice they made.
what everyone would do
Every assortment-planning instinct answers 'look richer' with 'stock more': add SKUs, widen the range, deepen the buy. That is what the tools optimise — quantity and mix of actual items. But inventory is expensive, and best-case it raises perceived variety only linearly with what you spend on shelf space, so 'buy more' is an expensive, water-logged lever for the goal of feeling bigger.
what they saw
Perceived variety is a judgment shoppers form from the structure on offer — how many separate categories they are shown — not from a census of items. Re-sorting the same goods under more labels inflates perceived choice.
the move
The finding, the 'mere categorization effect', is that perceived variety and outcome satisfaction are driven by the NUMBER of category labels over the assortment — not by how many items sit under them, and not by what the labels actually mean. Adding category headers to the same products raises the choice's perceived size and the chooser's satisfaction; dropping the headers shrinks both. Because most of the perceived richness is 'painted' by structure rather than stock, a retailer can re-present exactly the same inventory under more categories and have it be experienced as a bigger, better assortment.
why it works
Choosers use the number of category headers as a fast, credible signal of how much variety exists, because category count is more salient and easier to scan than a tally of SKUs, and because more categories lets each choice feel self-determined — choosing within a category reads as an expression of taste, which raises post-choice satisfaction even when the outcome is nearly identical. That is why the effect survived meaningless or near-empty labels: the signal comes from the count of headers, not their content. The retailer gets the perceived richness of a deep assortment while holding inventory, space, and leftover-waste cost constant.
the payoff
Adding category labels to the same items raised perceived variety in field and lab studies, with zero change to the physical assortment.
where it breaks
The effect runs on perceived variety, so it collapses where shoppers know the domain and the assortment is small enough for them to actually count the items — the authors found the gain attenuated for choosers familiar with the category, who rely on item count not labels. It also cannot manufacture real differences: if the categories are empty, labelled units that then fail to deliver, the inflated expectation is exposed at the point of choice or use. And re-categorising does not reduce the underlying purchasing or logistics problem when the deficiency is genuine scarcity of item vs. merely a compressed presentation of what is already there.
what came after
Published in the Journal of Consumer Research (2008) and widely cited, the mere categorization effect became a standard reference for how assortment structure — not just assortment content — shapes choice. It is commonly taught as the reason online and brick-and-mortar retailers shelve and name their ranges in granular segments, and why 'more categories' can outperform 'more products' as a cheap route to a satisfying assortment.
references
- [1]Mogilner, Rudnick & Iyengar — The Mere Categorization Effect (Journal of Consumer Research 35.2, 202–215)Journal of Consumer Research, 2008doi.org
- [2]Journal of Consumer Research full issue recordOxford University Press / Journal of Consumer Research, 2008academic.oup.com