Hey brands, I have a secret for you. Come in a little closer.
You’re leaving money on the table.
What do you think happens when an expert visits your ExpertVoice-hosted store and the product they want is out of stock? Do they wait for it to become available? Or do they purchase a similar product from another brand — one they can buy right then? We wanted to know the answers to these questions, so we observed expert purchasing behavior after placing an out-of-stock (OOS) request.
And that’s where we made our discovery: limited inventory means limited sales.
We learned that when experts are in a buying mood, they’re going to make a purchase. If the item they want isn’t available, they place an out-of-stock order, then keep shopping. And most likely, they end up making a purchase … from another brand. In fact, the data shows that experts spent hundreds of thousands of dollars on other brands after submitting OOS requests. So if a brand missed them at the time they were interested in purchasing a product, they most likely missed their chance altogether — and that equates to lost dollars. I know it’s not what you want to hear, but it’s the truth: When your products are not in stock, experts shop elsewhere — and spend their money on other brands.
Prove it? You got it.
Check out the chart below to see the data we compiled from brands that received out-of-stock requests and expert behavior after making those requests. And to prove that the phenomenon isn’t limited to just one category we highlighted tactical, bike, ski, outdoor and nutrition brands.
Experts are taking their money elsewhere.
Experts are doing the training and passing the Edu-Games to find that the product they were ready to reward themselves with isn’t available. That’s a bummer for experts. It’s like waiting in line on Black Friday only to discover that the store ran out of the specific TV you wanted — right before you made it to the counter. But it’s also a bummer for brands because the expert is still going to purchase a TV, they’re just not going to buy it from you.
Let’s look at the tactical brand below. 218 experts visited that brand’s store and noticed the product(s) they wanted to purchase were out of stock, so they put in an OOS request, asking to be notified when the item(s) would be available again.
By the time those products were back in stock, only 5 of the now-available items were purchased by those who made the request. And just 29 of the 218 experts purchased from that brand again.* Those 189 customers who didn’t come back when their requested products were purchasable went on to spend more than $193,000 on other brands. Pretty shocking, right?
Those 5 purchased items helped the tactical brand recoup $134.02 of their $12,000+ lost dollars, which is great. But the writing is on the wall: the brand lost thousands of dollars and almost two hundred expert customers — arguably the most valuable customers of all — because the products the experts wanted to purchase weren’t available.
Also, check out the bike brand. They lost millions of dollars. Yikes.
It’s not just about lost dollars.
Take a look at the outdoor apparel brand. They had 146 OOS requests placed by 74 experts. That’s almost two products per expert. What does that mean and why does it matter? If I visit a store and just one of the items I’m looking for isn’t available, that’s frustrating. But if two are unavailable, that’s a negative experience. And just like the chart shows, I’m not likely to visit that store again.
Just one of those 146 requested products ended up being purchased and only one of those 74 experts returned to the brand’s store after their negative experience. The lost dollars are important, but they’re not the only consideration. Brand loyalty and brand reputation are also at stake. How are you building affinity and advocacy with an expert when after they’ve invested the time to be educated about your brand, the items they’d like to purchase aren’t available? Unfortunately, you’re not.
Good news: There’s something you can do about it.
Provide a better experience, sell more and don’t give experts a reason to spend their money on competing brands! We’re sorry, we don’t mean to yell, it’s just that this could all be done by expanding your inventory. Such a simple solution to such a pricey problem.
For some brands, it’s a matter of not knowing how to improve their store and increase their inventory — we’re here to help. Here are a few tips:
- Refresh your inventory feed often (every day, if possible)
- Don’t set products to “Always available.” This causes canceled orders and a bad user experience
- Reach out to your Customer Success Representative to explore inventory automation programs
Key takeaway: Increase your inventory and watch your sales grow. And if you need help, let us know. (We didn’t mean for that to rhyme but we’re not mad about it.)
*Data gathered between January 1 – June 30, 2018.