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Impact of Stock-outs on Customers at Online Marketplaces

Authors: Harsh Jain, Chetan Panse

Journal: International Journal of Advanced Science and Technology

Publication date: 2020

Publisher: Science & Engineering Research Support Society

URL: click here


Abstract:

In today’s world, the most unfavorable situation, an organization faces when it comes to online selling is getting a sold-out or out-of-stock scenario. It is a very serious matter that can be counterproductive to any business's bottom line. Apart from the missed revenue, stock-outs often result in lower customer satisfaction and reduced loyalty. If a consumer wants to purchase a product that is out of stock, they will end up dissatisfied with the issue of inventory and you do most likely not want to dishearten your customers. Sales, brand identity, and strategic planning plans are all impaired due to stock-outs. Shopper polls show stock-outs are the most common problem among consumers when it comes to shopping online. Consumers usually do one of five things when they can't locate the same commodity they are searching for. Either they replace the product within the same company; they choose a new company; they postpone their order until the item is back in stock at the same website; they don’t buy the item at all, or, worse, they buy the item from some other website/retail shop. Through online shopping, consumers may search the stock-out item details, thus shifting their tastes for the stock out items. In this paper, we examine the above-mentioned ill-effects of stock-out on customers purchasing products from online marketplaces. Using a non-parametric test, we will study the association between the customer’s gender and their propensity to buy the same commodity from a retail store when it’s not available online.