Sales Revenue Effects of Branch-Distinctive Assortments Within Retail Categories
(A2026-132368)

AUTHORS

Pei Yu Chien, Institute of Technology Management, National Tsing Hua University; Jack Cadeaux, University of New South Wales

ABSTRACT

For a convenience store chain, this study observes how branch-store assortments within product categories differ from estimated chainwide assortment profiles of SKUs within categories. It measures the cosine dissimilarity between the binary stocking status vector of a category’s observed assortment of SKUs at each store and the vector of stocking proportions for all potential SKUs in each category across all stores. A pooled analysis of 5,852 store-category pairs shows a small negative effect of such within-category assortment distinctiveness on each-pair’s sales revenue. This effect varies across categories. Several important categories show a positive effect (bread, convenience meals and health and beauty) but two show a negative effect (cooked meals and freshly brewed tea and coffee). We discuss how such differences could arise from operational aspects of store assortment management and propose using the cosine dissimilarity measure as a tool to design future field experiments.