Opportunities for active stock-out management in online stores: The impact of the stock-out policy on online stock-out reactions
AbstractThis paper investigates the impact of an online retailer's stock-out policy on consumers' category purchase and choice decisions. We investigate three different policies: (1) stock-outs are immediately visible and there are no replacement suggestions, (2) stock-outs are only visible after purchase attempts and (3) stock-outs are immediately visible but a replacement item is suggested. Results from an online grocery shopping experiment reveal that the adopted stock-out policy has a significant impact on both decisions. Making stock-outs not immediately visible creates confusion and intensifies the consumer's loss experience, thereby reducing the tendency to buy in the category. Suggesting a replacement item, in contrast, facilitates the substitution decision and slightly reduces the purchase cancellation rate. It also substantially increases the suggested item's choice probability. Yet, this effect disappears when higher-priced - suspicious - items are suggested. Overall, these results indicate that online grocery retailers have an interest in pursuing open and convenience-oriented stock-out policies. (c) 2006 New York University. Published by Elsevier Inc. All rights reserved.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/101536.
Date of creation: 2006
Date of revision:
Publication status: Published in Journal of Retailing (2006) v.82, p.215-228
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Web page: http://www.kuleuven.be
stock-out policy; online stores; consumer purchase decisions; consumer response; choice; model; price; assortment; recommendations; segmentation; perceptions; retailer; variety;
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- Rosato, Antonio, 2013. "Selling Substitute Goods to Loss-Averse Consumers: Limited Availability, Bargains and Rip-offs," MPRA Paper 47168, University Library of Munich, Germany.
- Stavrulaki, Euthemia, 2011. "Inventory decisions for substitutable products with stock-dependent demand," International Journal of Production Economics, Elsevier, vol. 129(1), pages 65-78, January.
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