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.
- Where will online orders get fulfilled? The changing local geography of e-commerce – The Brookings Institution
- Reducing online out-of-stocks critical for retailers, says GMA study – Supermarket News
DISCUSSION QUESTIONS: How can brick and mortar retailers correct poor perception problems about their out-of-stocks? Should physical retailers try to point out the availability challenges faced by digital-only competitors?