Consumer Response to Stockouts

This is a preliminary draft. All comments and suggestions are welcome. Please do not quote without the author's permission. and in particular to the king of advisors, Don Lehmann, whom the author hopes he grows up to be like someday. ABSTRACT We explore consumer responses to stockouts, both in terms of consumer satisfaction with the decision process, and in terms of subsequent store choice behavior. A series of four laboratory experiments involving stockouts in a consumer choice context are run. The results of these experiments suggest that consumer response to stockouts is driven in large part by two factors: the effect of a stockout on the difficulty of making a choice from the set, and the degree of personal commitment to the out-of-stock alternative. We show that personal commitment to an out-of-stock choice option is a function of preference for the option, whether the option is included in the consumer's consideration set, and the degree to which the stockout announcement is personally directed. We find that as personal commitment to the out-of-stock option increases, consumers react substantially and negatively to the stockout – they report lower satisfaction with the decision process and show a higher likelihood of switching stores on subsequent shopping trips. However, under conditions in which personal commitment to the out-of-stock option is low and the stockout leads to a decrease in the difficulty of making a product selection, we find that consumer response to the stockout can actually be positive. 1 This paper identifies the conditions in which a stockout provokes a severe response from consumers. Theoretically, we suggest that consumers will react negatively to a stockout in proportion to the consumer's personal commitment to the out-of-stock option. We argue that personal commitment to a choice option is a function of preference for the option, whether it is a considered option, and whether any choice constraint is personally directed. We also suggest that consumer response is effected by changes in the difficulty associated with making a decision that may be caused by a stockout (i.e., a change in the choice set composition due to a stockout makes it more or less difficult to make a choice). When a stockout leads to an increase in decision difficulty consumers will respond more negatively, while if the stockout leads to a decrease in difficulty the response to a stockout can be positive. Our results across a series of studies provide …