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Dynamics in consumer response to product unavailability: Do stock-out reactions signal response to permanent assortment reductions?

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  • CAMPO, Katia
  • GIJSBRECHTS, Els
  • NISOL, Patricia

Abstract

This paper investigates consumer reactions to out-of-stocks (OOS) – which are unexpected and temporary in nature – as opposed to permanent assortment reductions (PAR). We discuss similarities and differences between OOS and PAR reactions as well as their underlying factors, and empirically test our propositions in two product categories. Next, managerial implications are discussed. Our results indicate that retailer losses incurred in case of a PAR may be substantially larger than those in case of a stock- out for the same item, suggesting that retailers (i) should be cautious in extrapolating consumer response to stock-outs, to situations where the item would be permanently removed, (ii) should keep a minimum of variation in the assortment even if this implies a higher stock-out risk for these items, (iii) may wish to explicitly signal the temporary character of a stock-out by leaving the shelf space of the OOS item unused. The results further suggest that stock-out losses may disproportionally grow with stock-out frequency and duration, emphasizing that even if OOS cannot be completely avoided, efforts should be made to keep their occurrence and length within limits.

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File URL: https://www.uantwerpen.be/images/uantwerpen/container1244/files/TEW%20-%20Onderzoek/Working%20Papers/RPS/2000/RPS-2000-024.pdf
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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2000024.

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Length: 32 pages
Date of creation: Dec 2000
Date of revision:
Handle: RePEc:ant:wpaper:2000024

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Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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  1. Babin, Barry J & Darden, William R & Griffin, Mitch, 1994. " Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value," Journal of Consumer Research, University of Chicago Press, vol. 20(4), pages 644-56, March.
  2. Fitzsimons, Gavan J, 2000. " Consumer Response to Stockouts," Journal of Consumer Research, University of Chicago Press, vol. 27(2), pages 249-66, September.
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Cited by:
  1. Bhatnagar, Amit & Syam, Siddhartha S., 2014. "Allocating a hybrid retailer's assortment across retail stores: Bricks-and-mortar vs online," Journal of Business Research, Elsevier, vol. 67(6), pages 1293-1302.
  2. Sloot, L.M. & Verhoef, P.C. & Franses, Ph.H.B.F., 2002. "The impact of brand and category characteristics on consumer stock-out reactions," ERIM Report Series Research in Management ERS-2002-106-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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