Simultaneous vs. Sequential: Optimal Assortment Recommendation in Multistore Retailing

Yicheng Liu (), Xiao Alison Chen (), Yan Liu () and Zizhuo Wang ()
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Yicheng Liu: Research Institute for Interdisciplinary Sciences, School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai 200433, China; and Key Laboratory of Interdisciplinary Research of Computation and Economics (Shanghai University of Finance and Economics), Ministry of Education, Shanghai 200433, China
Xiao Alison Chen: Peter T. Paul College of Business and Economics, University of New Hampshire, Durham, New Hampshire 03824
Yan Liu: Department of Logistics and Maritime Studies, Faculty of Business, Hong Kong Polytechnic University, Kowloon 999077, Hong Kong
Zizhuo Wang: School of Data Science, School of Management and Economics, The Chinese University of Hong Kong, Shenzhen, Guangdong 518172, China

Manufacturing & Service Operations Management, 2025, vol. 27, issue 3, 825-842

Abstract: Problem definition : We study a multistore assortment planning problem in which a seller centrally decides the assortment of products in each store. Each store is visited by a certain fraction of customers. Upon arrival, customers observe the products offered in the current store. The seller can either (1) show products offered in other stores to customers simultaneously (called simultaneous offering strategy) or (2) show products offered in other stores to customers if they decide not to purchase in the current store (called sequential offering strategy). Customers may incur a disutility if they choose products from other stores. We study the optimal assortment planning problem under each of the two strategies and compare their performance. Methodology/results: We show that under the simultaneous strategy, the optimal assortment for each store is revenue-ordered, and the seller cannot do better than if it operates each store separately. In contrast, adopting the sequential strategy can significantly increase the seller’s revenue. In particular, when customers’ disutilities of purchasing from other stores are universally homogeneous, the optimal assortment under the sequential offering strategy is revenue-ordered for each store, and the store with a lower (higher, respectively) demand should offer a larger (smaller, respectively) assortment to facilitate the sequential selling process. We then compare the two offering strategies in terms of the seller’s revenue and customer surplus, and we analyze the impact of parameters on the revenue comparison. We also consider several extensions (e.g., heterogeneous valuation, capacity constraint, and partial recommendation) and find that our main results still hold qualitatively. Managerial implications : The sequential offering strategy may be a better strategy for sellers in practice. We provide detailed guidelines for sellers to implement the sequential strategy, such as regarding the optimal assortment decisions and when sellers can exploit the most benefits.

Keywords: multistore retailing; assortment optimization; simultaneous/sequential offering strategy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormsom:v:27:y:2025:i:3:p:825-842

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