Assessment of the Effect of Out-of-Stock on Customers Purchasing Behavior

Abstract

The objective of this exploratory study was to examine stock-outs as an event and document their effects on changes in customer attitudes. A study containing both open-ended and close-ended elements was validated through a pilot study and used to collect data from 100 randomly selected participants spending at Shewa Shopping Center in Addis Ababa. The finding indicated that repeated stock-out experiences reduced customers' loyalty to brand and retailer and caused customers to leave both retailers and brand. Participants indicated that stock-out effects can be shielded through improved inventory management and better customer service. Explicit recommendations involved apology, price discounts and free delivery. The finding of this study will enable retailers to gain deeper considerate of how stock-out affects customers shopping experiences and loyalty, and offer alleviation measures to improve both. In addition, the finding will provide a positive change to both customers and retailers, where shoppers will enjoy pleasant shopping experiences and retailers can maintain their competitive advantage via loyalty of their customer.