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

Els Breugelmans, Katia Campo and Els Gijsbrechts

Working Papers from University of Antwerp, Faculty of Business and Economics

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.

Pages: 40 pages
Date: 2005-12
New Economics Papers: this item is included in nep-acc, nep-bec and nep-dcm
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2005005

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