Turn Out-of-Stocks to Your Advantage

What are the effects on your shoppers when you run out of an item shoppers expected to purchase from your store? How might you turn those effects to your advantage?
     Here are a few tips, using research findings from Indiana University-Bloomington, University of British Columbia, and Northwestern University:

• Consumers who have repeatedly purchased a small set of items from you will desire some of those items even more strongly when they discover other items in the set are out-of-stock (OOS). The more general finding is that loyal customers who encounter an OOS become more likely to come to your store promptly when sales on high-demand items are announced. Coach your store staff to sincerely empathize with the shopper and give helpful guidance, such as telling the shopper when the next shipments are due. 
• For consumers who purchase a particular item at regular intervals, encountering an OOS repeatedly will lead the consumer to change item preferences. When an item is OOS in your store, use signage to suggest an alternative which you do currently have in stock. 
• Shoppers’ price sensitivity increases when they encounter out-of-stock items. They dislike the feeling they are being required to buy a substitute for meeting their needs. To lessen the negative feelings, offer alternatives at a range of price points. 

     Researchers at American University in Washington, D.C. and University of Arizona suggest you be ready for a shopper to veer off to a wholly different choice after learning an item the shopper has carefully chosen is OOS.
     Say a shopper comes into your store and looks at expensive ink pens. The shopper narrows the choices to two, both of which have an extra-fine felt tip. The only difference between the two is the ink color, which the shopper decides is not that important.
     Then when the shopper asks for the pen with the blue ink, he’s told it is temporarily OOS. He’s asked if he’d like to place an order, and he’ll be notified when the pen arrives. He declines. The salesperson—knowing the value of selling substitutability—offers the shopper the extra-fine felt tip pen with the black ink.
     But, like a majority of the participants in the American University/Arizona study, the shopper goes off in a different direction, such as purchasing a fancy ballpoint pen with blue ink. Because of the OOS, the blue ink color becomes more important than the felt tip.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Monitor the Sales Floor to Avoid Out-of-Stocks 
Control Out-of-Stock Irritation 
Decide Whether to Limit Purchase Quantities