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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

  • CAMPO, Katia

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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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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