Mogilner et al. showed more category labels boost perceived choice

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.

Re-sorted the same goods under more category labels, since shoppers gauge variety by header count, not item tally, inflating perceived choice at no extra stock cost.

Category count is more salient and easier to scan than item count, so shoppers use it as a quick signal of variety.

More categories make each choice feel self-determined, raising satisfaction even when outcomes are similar.

The effect persists even with meaningless labels, proving the signal is the number of headers, not their meaning.

Re-categorizing existing inventory avoids the cost and waste of adding SKUs while delivering the same perceived benefit.

Perceived value often comes from structure, not content; reorganizing what you have can be as effective as adding more.

Adding category labels to the same items raised perceived variety in field and lab studies, with zero change to the physical assortment. 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.