Sunday, July 31, 2011

Control Out-of-Stock Irritation

Studies suggest that when you’re out of stock (OOS) on an item a shopper has carefully chosen, you should have prepared for the shopper to veer off to a wholly different choice.
     Researchers at American University in Washington, D.C. and University of Arizona explain their results using an example, which I’ll adapt here: A shopper comes into your store looking for an expensive pen to give as a gift to a friend. After evaluating the available alternatives, 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 out of stock. He’s asked if he’d like to place an order, and he’ll be notified when the pen arrives. He replies that he can’t wait that long. 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 out-of-stock, the blue ink color becomes more important than the felt tip.
     Consumer psychologists attribute the abrupt change in priorities to a combination of shopper irritation (“You should have told me you didn’t have that pen in stock before I decided I wanted it!”) and a vying for control in what has become unpredictable circumstances (“When I come to your store because you carry a certain sort of merchandise, I do it because I expect you to reliably be in stock in that sort of merchandise!”).
     Stanford researchers found that being jilted by OOS’s can affect broad brand reputations. Study participants were told they could win Guess sunglasses by completing a word puzzle. Then upon trying to claim their prize, the winner was informed that the supply of Guess sunglasses was gone. And in a third step of the study, the winners were asked to rate Guess wristwatches and Calvin Klein wristwatches.
     The experience of being told Guess sunglasses were OOS led to lower ratings of Guess watches and higher ratings of Calvin Klein watches.
     You’re bound to be OOS sometimes. Ease the cross words and thoughts by allowing shoppers to maintain a sense of control.

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

Click below for more:
Monitor the Sales Floor to Avoid Out-of-Stocks
Replace Exclusivity with Substitutability

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