Consumer responses to shelf out‐of‐stocks of perishable products

Abstract

PurposeThis paper aims to identify customer behavior with regard to out‐of‐stocks (OOS) of perishable products (focused on bakery bread) and the resulting inventory performance for these perishable products.Design/methodology/approachInsights on how consumers behave when their preferred bread product is OOS are derived based on 3,800 customer interviews performed in three stores of a large Dutch grocery retail chain. Next to this, additional logistical information was measured on regular moments with respect to the shelf availability per stock‐keeping unit during the day and to waste at the end of the day.FindingsThe customer behavior with regard to perishables is observed to be different from that for the non‐perishable items. The key observation is that customers have a high willingness to substitute. The incorporation of the obtained knowledge of the observed consumer buying behavior into the existing automated store ordering (ASO) systems is discussed. In the current ASO systems, no distinction is made between perishable and non‐perishable products, as it is primarily designed and used for the non‐perishables. The authors show that the current ASO can be enriched and extended by taking into account some extra crucial parameters which are based on the observed consumer behavior.Originality/valueOne common factor in the research papers published so far is that they primarily looked into the customer behavior for non‐perishable items. The current paper on‐hand extends these works towards perishable items with a focus on bakery bread.

Consumer-Related Food Waste: Causes and Potential for Action

“…In a Dutch survey of bread customers, a high willingness to substitute by purchasing an alternative was found when items were out of stock in supermarkets. However, this finding was considered to be very category specific [25].…”

Research opportunities in supply chain management

“…The majority of researchers examined the distribution implications of product stock-outs, rather than buyer behavior issues. Researchers need to examine the roles that many supply chain members have in the availability of products in retail stores and how supply chains should process products being returned in a timely and economical fashion (Mollenkopf et al 2007;van Woensel et al 2007). …”

A comparison of RFID-based shelf replenishment policies in retail stores under suboptimal read rates

“…Prior research indicates that stock-outs are to a large extent caused by inefficiencies in the shelf replenishment process in stores (ECR Europe, 2003;Gruen et al, 2002). Stock-outs have severe impacts on retailers and suppliers alike if consumers substitute one item for another, switch brands, delay the purchase, or buy the product at a different store (Emmelhainz et al, 1991;van Woensel et al, 2007;Zinn and Liu, 2001). These reactions may result in a reduction in profit of up to 10% as well as long-term impacts on market share (Anderson et al, 2006).…”