Assessing the effects of assortment and ambience: A choice experimental approach

Elaborating on Betancourt and Gautchi, we formulate and test effects of consumption goal, retail assortment composition, and other distribution services on in-store purchase decisions. By using the extended logit model we explain the utility of an item as a function of assortment characteristics, which allows capturing substitution, complementarity and asymmetric dominance effects. A choice experiment manipulates assortment composition, prices, store ambience, competing store features, and purchase goal. In an application to florist stores we find that in-store purchase decisions are affected by the size and composition of the assortment, and by the presence of a competing store, but not by ambience. We find substitution effects between flowers of the same variety, but not for all varieties. Effects differ between consumption goals.