How does a shopper react to a product not being available? Her actions can be categorized into three key possibilities: either she will defer the purchase of that object until another shopping trip, she will buy something else, or she will buy nothing at all and continue with the rest of the shop. 

A shopper who really wants a specific product may defer a purchase to another trip if that product is unavailable. That’s not all bad news for the brand owner, as the purchase will eventually be made (or may be made). Yet, there is always a chance of the shopper “cooling off” in the time between this disappointment and the next time she shops, and there is always time for a new message from a competitor to interfere and perhaps persuade her to buy something else. The cost of this delay may also impact consumption. If the deferred purchase is for a product still available to consume (for example, there is still shampoo at home), then the delay will not impact consumption at all—the consumer will have enough product to continue for some time, hopefully long enough for the purchase to be made. While a short-term sale has been lost, long-term consumption continues. Ultimately, if consumption is not interrupted, there will be no long-term loss of sales to the manufacturer.

If, however, the product is not in stock at the point of consumption, then the risk is high. If the consumption occasion is for a carbonated drink and there is no stock at home, what will the consumer do? The shopper may be unprepared to switch to a different brand of soft drink, but the consumer almost certainly will. A consumer faced with a fridge devoid of Pepsi is unlikely to go thirsty. He’ll drink milk, water, or juice. The brand has lost the consumption occasion forever! If the consumer usually drinks a can a day, he is unlikely, after all, to drink two the following day to make up for the missed soda. You can’t get that volume back; that volume is gone—and that means that over the long term, the amount bought will likewise be lower.

As you can see, when evaluating the shopper marketing mix, understanding the consumption behind the shop is critical. Further, the deferred purchase potentially costs a retailer more. While retailers bombard shoppers with loyalty-laden offers, the reality is that most shoppers use many stores in a week to satisfy their needs. There is a good chance that the deferred purchase will take place in a different store, and potentially one owned by a competitor. The retailer stands to lose much more from the deferred purchase, on average, than the manufacturer.

All retailers hail the switcher shopper. When a shopper decides to switch brands or products in the face of in-store unavailability, then things look brighter for the retailer. At least the retailer makes a sale, even if the manufacturer didn’t. The switched product might even be more expensive or more profitable to the retailer! Of course, there’s just as much chance that the shopper will switch to a cheaper or less profitable product, but at least a sale is made. More damaging to the retailer is that the shopper’s image of the store may be damaged by the out-of-stock—and if it happens consistently, the shopper may well question the wisdom of shopping in a store that habitually lacks some of the products she wants to buy.

To manufacturers, the switched purchase is a terrible situation. Not only do they lose a sale today, but consumption of their brand is likely to be replaced (and therefore lost forever) with consumption of a competing brand. Worse, a (potentially) loyal consumer is now going to try that competitive product and may well like it—or even prefer it. A relationship with a loyal consumer, built up with potentially millions of dollars of marketing, could be destroyed by a simple out-of-stock. With this in mind, it really is hard to fathom why so many marketers do not pay closer attention to what happens in stores.

So, faced with unavailability, the shopper may defer purchase or switch to a competing offer. But she may also make the third potential choice—she may simply buy nothing. When this happens, both parties lose. A purchase is lost, and the brand is not available for consumption. Clearly, the need to buy wasn’t that great, but the chance to get a sale in the short term—and the opportunity to nurture a relationship in the long term—has vanished. The consumer marketing mix may have been very effective, but the ball was dropped in this crucial part of the shopper marketing mix.

This blog found in Course 22: Availability.