This paper investigates the impact of an online retailer's stock-out policy on consumers’ category purchase and choice decisions. We investigate three different policies: (1) stock-outs are immediately visible and there are no replacement suggestions, (2) stock-outs are only visible after purchase attempts and (3) stock-outs are immediately visible but a replacement item is suggested. Results from an online grocery shopping experiment reveal that the adopted stock-out policy has a significant impact on both decisions. Making stock-outs not immediately visible creates confusion and intensifies the consumer's loss experience, thereby reducing the tendency to buy in the category. Suggesting a replacement item, in contrast, facilitates the substitution decision and slightly reduces the purchase cancellation rate. It also substantially increases the suggested item's choice probability. Yet, this effect disappears when higher-priced – suspicious – items are suggested. Overall, these results indicate that online grocery retailers have an interest in pursuing open and convenience-oriented stock-out policies.
Breugelmans, E., Campo, K., & Gijsbrechts, E. (2006). Opportunities for Active Stock-Out Management in Online Stores: The Impact of the Stock-Out Policy on Online Stock-Out Reactions. Journal of Retailing, 82(3), 215-228. https://doi.org/10.1016/j.jretai.2006.05.001