Online shopping

“Out of stock” is starting to define online shopping

Supply chains continue to groan under the weight of material shortages and shipping delays, driving historic out-of-stock (OOS) positions, and steering consumers toward substitutions.

At best, it’s a lose-lose-win scenario. Customers don’t get the brands they want and the brands lose the sale. The retailer wins, but only if the buyer accepts a substitute. Otherwise, it becomes a much more serious loss-loss-loss situation that creates lasting problems for merchants and brands.

As The Wall Street Journal reported in November, “out of stock messages to online consumers have increased 32% since June, with August levels highest for apparel, followed by sporting goods. , baby products and electronics, according to Adobe Digital Economy Index.”

Attempting to quantify the problem, PYMNTS surveyed nearly 2,100 U.S. consumers over the Black Friday weekend, finding that “stock-outs cost retailers up to $4.6 billion in lost Black Friday sales because 38% of shoppers – 55 million people – couldn’t buy at least one of the purchases on their list because retailers didn’t have it.

PYMNTS research found that consumers planned to spend an average of $253 on items that ended up out of stock, meaning “retailers lost a collective total of up to $30 billion” .

“The vast majority of shoppers who couldn’t find the items on their listings the first time around ended up going to other retailers…or ended up buying alternative items,” PYMNTS found, adding that 15% of shoppers faced with out of stock alerts did not buy anything at all.

See also: Stock-outs cost retailers up to $4.6 billion on Black Friday

Brands can be the biggest losers

The loss of OOS for consumers is experiential in nature – words like “frustrated” and “disappointed” apply, often accompanied by profanity – and the loss for retailers is considerable.

What’s less clear is the hit that out-of-stock brands are taking as the situation drags on.

In a blog post, e-commerce channel optimization (ECO) company CommerceIQ noted that “out of stock has long-term impacts. The brand has…lost repeat sales on the product. The lost sale reduces the relevance of the product for future searches, which overall reduces future sales, so maintaining a good inventory ratio is essential for any brand wishing to succeed in e-commerce.”

Industry news site MarketingMind has done OOS calculations that shed light on the losses, calculating that if a given brand experiences a 10% OOS rate in 50 stores or e-commerce sites selling on average 250 items per month each, lost brand sales total 12,500 items. from this sample only.

The message added that “manufacturers don’t want to give their loyal consumers any reason to try their competitors’ products, let alone force them to do so. Once these consumers have experienced something new, their loyalty could permanently shift to the competing product. In which case, in addition to the loss of current sales, the out of stock leads to the loss of future sales.

See also: Don’t expect durable goods to be ordered in 2021 until 2022 as supply chain issues drag on

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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICE IN THE DIGITAL ENVIRONMENT

On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.