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Recapture Sales from Digital Players by Improving Out-of-Stocks

Jul 10, 2019 2 min

In June, RetailWire published some of my thoughts on shifting the perception of in-stock challenges from traditional retailers to ecommerce. I discussed how traditional retailers can recapture sales from digital players who have significantly lower service levels by ensuring great availability in stores.

Stores Have Cut Out-of-stocks. Why Don’t Consumers Know That?

Research shows that online retailers have significantly lower service levels when compared to traditional retailers that operate warehouses and stores. Still, the perception persists that Amazon.com can quickly and efficiently deliver any product to your doorstep, while brick-and-mortar retailers constantly run out of stock on items. Why the disconnect and, more importantly for traditional merchants, how do you overcome that perception?

The perception disconnect is rooted in the fact that customers have grown accustomed to high availability as retailers have improved their supply chains and technology over the last 20 years. For physical retailers, an out-of-stock is as clear as the hole on the shelf. It’s tangible, and shoppers experience a time delay in acquiring the out-of-stock item — whether by visiting a competitor’s store or placing an order online.

While ecommerce customers may be unimpressed by poor availability, they are far less inconvenienced because switching to a competing online retailer takes just a moment’s time and a few mouse clicks. The negative impact on long-term loyalty in the ecommerce scenario is lower because it’s easier to shop multiple online retailers than multiple traditional retailers.

The key to shifting the perception of in-stock challenges when comparing traditional to ecommerce retailers is to make sure that, first and foremost, customers in brick-and-mortar stores see great availability. When stores experience out-of-stocks, they must act quickly to offer a substitute, or at least make the shopper aware of the stock-out to prevent unnecessary frustration. Simply changing the shelf display to cover up the missing item could also leave the customer dissatisfied and reduce loyalty.

It is particularly important for traditional retailers deploying services like buy online and pick up in store (BOPIS) as part of their digital marketing plans to optimize their inventories. Retailers face considerable risks if they try and fail to deliver on the brand promises they make as part of the value proposition versus e-tailers.

Brick and mortar retailers must clearly communicate that they have what their shoppers want and then deliver on that promise each and every time. This is critical for every channel the retailers deploy to engage their customers.

The text was originally published by RetailWire.

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Written by

Andrew Blatherwick

Chairman Emeritus and Advisor