Limiting stockout impacts on long-term customer behavior

There's been a lot of news around stockouts right now.

Stockouts suck for everyone.

Your store loses the sale. Your suppliers lose the order. The customer is disappointed.

Hoarders might benefit in the short-term but if their timing is wrong, they have to figure out how to unload a shed full of toilet paper. Literal flushing money down the drain.

Stockouts really suck for your store's long-term success.

If too many customers are disappointed too often, they'll leave and never come back (defect in industry jargon). Any competitor with inventory wins and acquires customers are a deep savings over normal times. Those customers are now with that competitor for as long as that competitor doesn't disappoint them more than your store did.

You might not be able to prevent stockouts as supply chains are mostly out of your control.

But you can try to prevent customer disappointment.

Remember that the customer wanted to buy a product for a reason.

Sometimes an alternative or substitute product can fulfill their reason.

Sometimes they can delay their order.

Offering options will reduce the long-term customer disappointment from stockouts. You can't solve every problem but if you can keep your customers around and get through the stockout, you could come out ahead.

Big stockout events, like ones going on now, should be noticeable in your customer behavior data. Cohort-based reports are helpful to spot stockouts and how much immediate damage they've caused. Long-term behavior shifts can also be spotted in a Cohort report by comparing them to regular cohorts.

The ability to compare cohorts is a big reason why the cohort reports in Repeat Customer Insights include a percentage option. That can factor out volume changes in cohorts and help you notice relative drops. e.g. "hmm, this stockout cohort has spent 30% less than a comparable cohort at this point in time"

You won't be able to solve all stockout problems but if you focus on limiting customer disappointment, you can lower their effects.

Eric Davis

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Topics: Customer behavior Out of stock products Product inventory

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