OOS can be defined as “the percentage of stock keeping units that are OOS on the retail store shelf at a particular moment in time” Gruen et al., 2002. With plenty of study already being done on consumer response to OOS (Zinszer et al., 1981; Schary and Christopher, 1979; Peckham, 1963), theories and frameworks have been created to explain OOS responses. (Zinn et al, 2001; Campo et al., 2000). Yet very little has been investigated into how consumers respond to out of stocks in a convenience store.
Variety and assortment are two of the many factors that drive customer satisfaction. However, two of these factors lose value when not complemented with good OSA (On Shelf Availability). In 1968 the Progressive Grocer conducted a report by A.C Nielsen to examine the phenomenon of OOS from two very different perspectives. The first, being from the side of the consumer, studying how a consumer responded to their desired product being out of stock. The paper assessed the consumer by categorising their response into 3 options: Substituting for a product within the same brand, substituting with a product from a completely different brand and completely refusing to buy any product. (Progressive Grocer, 1968).
The second side of the report looked at the supply and distribution end of OOS, trying to determine the affect’s it has on the supply i.e. Causes of OOS, Consequences of OOS. The results to this study opened the eyes to retailers as they found OOS levels to be 12.2% across all of the stores examined.
7 years later (Walter ; Grabner, 1975) expanded on the research done on OOS and constructed a model which emphasised 6 consumer responses rather than the 3 used in the (Progressive Grocer, 1968). The framework mapped out all of the possible outcomes made by a consumer. From this a rough estimate of the economic costs to retailers could be determined, and could also make suggestions to increase efficiency through implementing the data to ordering systems.
(Schary and Christopher, 1979) further extended the research by creating a process model which contained 5 responses which were considered as generic responses to OOS from over 1000 Surverys. These responses included:
• No Purchase
• Postpone Purchase
• Substitute to another brand
• Substitute within the same brand
• Buy nothing and purchase product from another store
These 5 responses have been used by many researchers in the same field. In fact, (Schary and Christopher) were the first noted researchers to analyse consumer responses patterns and connecting them to store attitude and brand loyalty.
(Emmelhainz et al, 1991) delved further into the research behind consumer response to OOS by conducting a study over a 4 day period at a discount grocery store. Purposely, five stock keeping units (SKU’s) were removed from their designated location in the store. The next step was to gather the consumer responses and compile them into a framework, which later became a decision tree outlining fifteen different variations of consumer responses. The flaw in this decision tree is that it is only focusing on substitution, which means this paper will only focus on the five generic responses presented by (Schary and Christopher, 1975) as it generalizes the consumer’s response to OOS better.
From 1991 onwards, research into the effects of OOS shifted as the focus became to develop new approaches and understand the determinants of consumer response to out of stocks, in particular with a hedonic and impulse purchase. So instead of focusing on gathering consumer response, researcher’s wanted to find out what factors drive these consumer responses.
The next piece of research came from (Verbeke et al, 1998), where factors such as the proximity of competing stores, number of purchases, consumer loyalty, household spend and change in assortment of stock were considered as determinants to consumer response to OOS’s. However, this paper possessed similar limitations to (Emmelhainz et all,1991) as it fails to look at all generic responses presented by (Schary ; Christopher, 1979).
(Campo et al. 2000) was the next major researcher to explore what factors drive consumer response to OOS, and he done so by creating a theory based model that hinges on all five of the generic responses.