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Opportunities for active stock-out management in online stores: The impact of the stock-out policy on online stock-out reactions

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  • BREUGELMANS, Els
  • CAMPO, Katia
  • GIJSBRECHTS, Els

Abstract

This paper investigates the impact of an online retailer’s stock-out policy on purchase incidence and choice. We make a distinction between three policies: (1) stock-outs are immediately visible and there are no suggestions, (2) stock-outs are only visible after clicking and (3) a replacement item is suggested for each stock-out product. Results from an extensive and realistic online grocery shopping experiment reveal that the adopted stock-out policy has a significant impact on both decisions. First, making stock-outs not immediately visible creates confusion and intensifies the consumer’s loss experience, thereby reducing the tendency to buy in the category. Second, while suggesting a replacement item normally leads to a substantial increase in the item’s choice probability, this effect is canceled out when higher-priced – suspicious – items are suggested. Overall, these results indicate that retailers have an interest in pursuing open and convenience-oriented stock-out policies.

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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2005005.

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Length: 40 pages
Date of creation: Dec 2005
Date of revision:
Handle: RePEc:ant:wpaper:2005005

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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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Cited by:
  1. Breugelmans, Els & Campo, Katia, 2008. "Can in-store displays improve category sales and brand market share in online stores? A study on the overall effectiveness and differences between display types in an online FMCG context," Research Memorandum 035, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  2. Penn, Jerrod & Matopoulos, Aristides & House, Lisa, 2010. "Response to Out of Stock Produce and its Underlying Economic Considerations," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56487, Southern Agricultural Economics Association.
  3. Nicole Wiebach & Jana L. Diels, 2011. "The impact of context and promotion on consumer responses and preferences in out-of-stock situations," SFB 649 Discussion Papers SFB649DP2011-050, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

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