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The strategy of giving customers what they want can backfire when it comes to designing and managing product assortments. Not only does offering more options lead to higher costs for the company, larger assortments often lead to lower probability of purchase and decreased satisfaction due to choice overload. Surprisingly, most consumers (as well as many managers) are unaware of the drawbacks of larger assortments, displaying preference for the greater variety of options even in cases when such variety makes consumers less confident in their decisions and lowers their satisfaction with choice. Understanding the psychology of choice gives managers a competitive advantage, allowing them to design assortments and product lines that create value for both the company and its customers

When More is Less and Less is More: The Psychology of Managing Product Assortments