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Variety for Sale: Mass Customization or Mass Confusion?

Cynthia Huffman and Barbara E. Kahn, 1998 [98-111]

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Mass customization or "high variety" strategies offer a way for retailers to differentiate themselves from their competitors. In an effort to attract customers into their stores, retailers may advertise a wide-variety product line designed to appeal to every consumer taste. "Category-killers" such as Circuit City (electronics) or Toys 'R' Us have used this strategy successfully.

There is a significant potential drawback to high variety strategies, however. If a customer is overwhelmed by the huge assortment offered or frustrated by the complexity involved with making a choice, he or she may delay the decision or walk away without purchasing. Customer frustration may result in overall dissatisfaction with the shopping process, and may evolve into bad word of mouth for the retailer. The purpose of this article is to suggest ways that a retailer can mitigate the perceived complexity and frustration that may result from high variety strategies.

From experimental evidence, the authors find that one key to customer satisfaction is how the retailer helps a nonexpert consumer figure out which options best fit his or her needs. It appears that customer satisfaction depends on: (1) the way information about product options is presented to the customer, and (2) the degree of customer input in the process of learning about options.

They find that when product assortments are complex, customers are more able to absorb necessary information about the options if they are asked their preferences for each feature one at a time, rather than asked to compare different alternatives. For example, consider the process Dell Computer uses in direct sales. Rather than asking their customers which completed computer they like, or asking them to modify an exhibited version to fit their own needs, Dell asks for customer preferences on each feature: memory, RAM, number of ports, etc. A customized computer is then developed based on these preferences and budget considerations. In contrast, in customized kitchen or sofa shops, the customer is usually shown various showroom displays of completed kitchens or sofas and asked to indicate what they like or don't like. For complex choices, this approach is likely to yield decreased satisfaction. Although the authors do not advocate eliminating product showrooms, they suggest that in some situations the consumer needs to learn his or her preferences before being exposed to these showrooms.

The research also indicates that the optimal degree of customer input is a moderate one in which customers are encouraged to express their preferences for various critical features of the product. Customers are less satisfied if they are only shown the features, a less effortful task than indicating their preferences. They are also, however, less satisfied, if they are asked to do too much, e.g., to indicate which features are relatively more important to them, or what trade-offs among features they are willing to make.

This finding suggests that salespeople should attempt to involve customers more in the interaction when explaining the different options. For example, in a custom sofa shop, a salesperson should not only tell the customer what the critical features of a sofa are, e.g., the type of underlying construction, the outer fabric, or the size and shape of the sofa, but should encourage the customer to indicate which type of construction he or she prefers, what kind of fabric is better, etc. Pushing the customer too far—"what aspect of a sofa is most important to you?"—is likely to backfire and frustrate the nonexpert consumer, however.

Cynthia Huffman is Assistant Professor of Marketing and Barbara E. Kahn is Professor of Marketing at the University of Pennsylvania.

Authors' Note: The results reported here are preliminary in the sense that the data was collected with student subjects rather than through in-store fieldwork. Field testing of the hypotheses is planned.

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