Various cart abandonment surveys conclude that around 25% of online customers abandon their cart due to out-of-stock issues.   

But the frequency of the stockout events is much higher than 25% as many customers encounter an out-of-stock page even before they’ve added one item to their cart, causing them to abandon the site altogether.

Furthermore, the impact of out-of-stock (OOS) extends well beyond the lost sales of the item alone. OOS have been shown to reduce the satisfaction a consumer has with a given purchase decision, leading to subsequent behaviors such as store- or brand-switching, complaints, and negative word-of-mouth. 

So how can we tackle the out of stock problem online retailers are encountering today?

To answer this question it is important to understand the impact of an online retailer’s stock-out policy on consumers’ behavior.

A New York University research published by Elsevier Inc. investigated this issue and concluded that:

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 facilitates the substitution decision and slightly reduces the purchase cancellation rate. It also substantially increases the suggested item’s choice probability.

Thus, it is clear that the ‘out-of-stock notification’ should immediately be visible to the customer on the product page rather than be presented only at checkout.

The question is what should be the next step. With technology on our side, retailers can now take action in real time to proactively induce the users to make a purchase, either on the same session or in the future.

When presented with the notice the online retailer can implement the following actions:

Present a recommendation for an alternative product

Online retailers should aspire to be able to personalized the recommendation according to the user’s profile.

Presenting to the user personalized product suggestions can increase sales by up to 30%.

Offer a sweetener

If presenting a slightly more expensive replacement product  consider offering a discount coupon for that product, so as not to alienate the customer.

Email customers

Offer your customer to receive a back in stock notification email. This is a great tool to obtain potential customer’s details even before they’ve registered.

According to a new report by The Luxury Institute 71% of consumers appreciate receiving notifications when an item that they had wanted comes back in stock.

To ensure such notification, implement an automatic email remarketing tool on your website.  If implemented wisely, back-in-stock alert emails can achieve a massive 25% conversion rate.

Offer in store options

If you are a multichannel retailer, direct customer to the nearest store in case the product they’ve afte is available there.

Consider suggesting a time limited discount coupon to enhance their action.

In summary

If treated in the right manner, an out-of-stock incident can be turned into a great opportunity to capture the visitor’s email.

Act upon your promise and send a ‘back-in-stock email’ as soon as the product is back in stock, and you are on the path of winning another loyal customer.