The Upside of Social Crowding on Consumer Product Preference

Abstract

As a pervasive marketing strategy, product bundling is widely used in marketing practice to increase attractiveness of a single offer by including multiple items. The present research investigates how marketers should determine the type of products in the bundle (whether the bundle should have more diversity in product items or focusing more on some dominant items). We propose that social crowding (vs. low crowding) in a retail setting will increase consumers’ choice share of their favorite item in the bundle, and thus, including more items of customers’ favored option at the cost of reducing varieties in the bundle would increase sales. Two field studies with participants’ real purchase behavior and three controlled experiments were conducted to test the proposed hypotheses. The results of Study 1 revealed that in a crowded pop-up store, the real purchase rate was significantly lower when the bundle did not have the best-seller flavor than when the bundle had one or two best-seller flavors. The findings of Study 2 further showed that participants in the crowded store included more of their favorite mooncake flavors in the bundle than those in the uncrowded store. In Study 3, we examined the influence of social crowding on consumer preference for product bundle in a well-controlled laboratory setting and explored the underlying mechanism. Our findings indicated that the perceived availability of products mediated the above effect. What’s more, Studies 4-5 documented the moderating role of inventory replenishment and assortment size. To summarize, findings of current research provide important managerial implications for retailing, product bundling, and in-store product display. For instance, retailing stores have different levels of crowding depending on the time (e.g., peak vs. non-peak hour) and geographic location (e.g., locations in high-density vs. low-density residential area). Our results suggest that marketers should provide the product bundle either with more dominating items or not based on the crowding level of retailing environment.