Effect of Out-of-Stock or Discontinued products in eCommerce sites

Many people think that it is not a good thing to display out-of-stock (OOS) or discontinued products in e-commerce web sites. But let us not jump to a quick conclusion like this one, unless you have some statistical data or analysis which backs your decision. In e-commerce arena, every move you make has an immediate impact. Being OOS does not sound good but making a decision just by thinking that it sounds bad, might cause bigger problems for your sales. What I would do is I would try to find a way around the OOS problem and still capture some sales over it. In this article I will try to share some methods and techniques you can use to achieve this.

A recent survey actually shows us how we should handle OOS products.

It is apparent from above results that even though a product is OOS, it is possible to keep some portion of the interest on your OOS product and even generate some sales over it. If you had not displayed the product on your website, you would have missed all these opportunities.

So, basic idea should be to keep the shopper on your site and try not to lose him to another competitor.  Here are some techniques you can use and still make sales over an unavailable product:

Prepare an alert mechanism that would warn the users when the product is back in stock
Do not complicate the life of the shopper, if shopper is already a user, then display a simple but nice button, if not together with the nice button also display an email field to get the shoppers email address for alerting mechanism. If you want you can ask him to sign up for periodic news from your company, by displaying a simple check box.

Use cross-selling or up-selling techniques to suggest alternative products
Cross selling and Up-selling are commonly used techniques in sales and marketing. Definition of Cross selling really changes from company to company depending on the size or the industry. In our case we are using it to direct our shopper’s interest to another similar product which we may also call a replacement product. This method can be used if product is OOS or discontinued. Here is how Lancome-USA offers another product instead of a discontinued product. Notice the slogan they use, I am not sure how good it works but it may have an effect on the shopper’s decision. “Since you liked, now you’ll love”

Also notice that they are recommending a similar product, in other cases, we could have recommended a more  expensive and somehow a little different product, in this case we would the up-selling it.

If you have a retail store chain, list the stores where the product is available
I know it is not as easy as it sounds. You need to have complete control over your commerce chain and monitor  availability in all channels. As long as you have this setup, you can display it correctly to the shopper. But if your do not have a good online system, you may choose to do it manually by marking products in other channels as in-stock or out-of-stock. But be careful to update it frequently and correctly, if shopper goes to the store you forwarded her to get the product and the product is not available, then you will find yourself in a bad situation. This is not good business.

Use backorder techniques and let users place orders for OOS products.
Backordering is a great and useful technique to prevent loosing shoppers. Very similar to alert mechanism, but in this case you treat the product like it is in stock and get the order for it. If there are other products in the same basket, then it is better that you split the order into multiple orders according to product availability.

For a good example of backorder mechanism, remember the launch of iPhone4 and how Apple collected orders before the actual iPhone4 launch date.

Many e-commerce storefront applications provide you with a check box to set a product as backorderable. And when the product goes out of stock, then it automatically becomes backorderable. This is the simplest method of defining backorder products. But there is more to it like for how long you will let shoppers order that OOS product, or would you have a limit on total backordered product count, or what will you display to shopper when that particular product is backorderable. The list can go on and on.

Conclusion
There are many other methods that you can use to protect your shopper’s interest and keep them on your site. In my previous article, I had also tried to provide you with some conversion methods, they help too. But in the end what is more important is your technical and functional capability. If you have people who can think about this and capable of implementing it then you are in good hands.

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