However, if a motivated shopper discovers the limited-edition item they’re desperately seeking is nowhere to be bought, their disappointment can turn into anger directed at the brand.
What are the best ways for a manufacturer to realize advantages of limited editions while avoiding the risks?
Based on their study results, researchers at University Witten/Herdecke, The University of Texas at Austin, University of Muenster, University of Auckland, and Arden Automobilbau GmbH recommend manufacturers produce or stock enough items to satisfy at least immediate customer demand. To avoid harming store or item brand value and repurchase intentions, ensure that any customer who wishes to purchase a limited edition at market launch can get one.
These researchers also explored techniques for producers who choose to reject this guidance and instead build excitement by intentionally underproducing for a product launch. In my email exchange with Prof. Michael Steiner, the principal investigator, he wrote, “Nike and Adidas could reduce some of the negative effects of immediate sellouts by combining online sales with a raffle system, ensuring that each customer has an equal chance of obtaining the desired limited edition.”
Even with this, some sellouts may be unavoidable. For such cases, a manufacturer can help check that at the retail store level, customers don’t feel they’re being mistreated. For example, retailers should use the term “sold out.” In ecommerce retailing, this resulted in better customer reactions than did the term “out of stock.” Item outage didn’t produce as much shopper outrage, according to studies at The University of Texas-Austin, Ulsan National Institute of Science and Technology, and Kyung Hee University.
The researchers say that when people hear “out of stock,” they think of problems with the supply chain: The retailer failed to place an order or didn’t conscientiously track the order. The supplier’s production broke down. The shipper failed to deliver on time. Somebody betrayed the customer.
“Sold out” has the implication instead of product demand which the retailer could not have been expected to anticipate. In the study, participants judged “sold out” to be caused by unexpected sales and therefore to be of shorter duration and more subject to replenishment than when “out-of-stock” was used.
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Leave Shoppers Feeling They’re Not Sold Out
Image at top of post based on photo by Paul Macallan from Unsplash
