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When It's Out of Stock

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Posted May 8, 2001 By Alexis Gutzman     Feedback

How you handle out-of-stock orders can affect your relationship with your customers, and your credibility as an e-merchant.

How do you handle out-of-stock inventory? How does your Web site handle it? Do you use out-of-stock merchandise as an opportunity to learn what your customers want? Have you even thought about what your customer sees when a product is out of stock?

Let's back up a step. There's no question that it costs more to acquire a customer than to get one to return. In case you want to bring some nicely consolidated data to your addled marketing department that's still recommending money be spent on acquisition rather than retention via e-mail, take a look at eMarketer's report from just this week, eMail: Hunting vs. Gathering.

Free Patio Furniture?
In the spirit of making the most of those who are already coming to your site and may even have purchased from you in the past, think about the experience your customer has when the product he wants is out of stock. I received an ad by postal mail for Patio.com this week, and, needing patio furniture, I clicked over there to see what they had. I found the patio table I wanted, and saw that it was priced at $0.00. Amusing, I thought. Obviously a mistake, but still, I'll put it into my basket (strange metaphor for patio furniture, don't you think; what kind of basket would you put a table into?). I then found four matching chairs sporting the equally alluring price of $0.00. I clicked on the checkout button from my shopping basket page, and was asked for shipping and billing information. Hey, I thought, they're going to let me place this order! My heart rate picked up. Sure enough, on the next page - without ever having to provide my credit card number - I received an order-confirmation number! Not only that, but I received order-confirmation e-mail telling me my order would arrive in four to six weeks!

From: <customerservice@patio.com>
To: <alexis@**********.com>
Sent: Monday, April 23, 2001 6:28 PM
Subject: Your patio Order

Thank you for your order. Since the patio furniture and
accessories has a limited season in many areas of the
continental United States, we make every possible effort
to delivery merchandise at the earliest possible date.
However, since we eliminate costly shipping charges by
shipping most merchandise direct from manufacturers, we
ask that you please allow 4-6 weeks for delivery of most
merchandise. Should the estimated lead time exceed 6
weeks on a particular item, you will be notified with an
additonal E-mail and you can cancel within 3 working days.

Note: The charge to your credit card will appear on your
statement as: R & R POOL & PATIO.

Thank you for your patience and understanding.

Before you click away from this column to Patio.com to place your order for free patio furniture, read on. I e-mailed Patio.com, asking when my order would arrive (before their confirmation e-mail arrived). The response I received -- within an hour of making my inquiry on their Web site - was from a sales representative who matter-of-factly told me, "The cast aluminum at price 0.00 is so set because it is currently not available. Please phone or e-mail me and I will assist you in selecting cast aluminum furniture that is available."

Of course, I never expected to get a cast aluminum patio table with four chairs for free, but there are people who believe that if they can place the order, even if the price is clearly wrong, the merchant has an obligation to ship the products at that price. Amazon.com and others have been sued or threatened with lawsuits by angry consumers who thought they ought to be able to get something for nothing if the Web site said they could.

How to Handle Out-of-Stock Orders
Let's learn a lesson from how Patio.com (mis)handled out-of-stock inventory, and look at how you might do it better:

  1. If the product is out-of-stock and there is no chance that you'll have this product again, remove it from the database or at least set the database so the product doesn't appear either in hierarchical display or as the result of a search. I once worked for a dot-com that kept out-of-stock merchandise in their store just to look bigger. One solution is to reorganize your categories so you don't have only one product in each category. Don't make your customers click through more categories just to give the appearance that you've got more stuff, especially when much of what customers are looking at is unavailable. Don't waste your customers' time.
  2. If the product is out-of-stock and you'll have the product again, but possibly not this season, mark the item as out-of-stock and don't allow shoppers to add it to their carts (see White Flower Farm for an excellent example of this approach). It does make sense to keep products in the store that you'll have again so that customers continue to visit your site, if only for research, until the products they want are available again.
  3. If the product is out-of-stock and you'll have the product again soon, give shoppers a chance to provide their e-mail addresses and be notified when the product becomes available. Make sure you really do notify them. I'm sure I've provided my e-mail address at least ten times to sites that told me they'd notify me when the product came in and only once have I been notified. Follow up with e-mail confirming that you'll let them know when the product is in available. That way, they'll have something they can search for later in their e-mail archives (if they keep any) when they wonder where it was that they found that product.

There are even more elaborate ways you can deal with unavailable merchandise. You can suggest comparable products in the margins of the product description page of an out-of-stock product. You can even post an informal survey in the margins asking things such as how soon the shopper would need the product (particularly relevant for seasonal products such as plants and outdoor equipment), how much the shopper believes the product in question is worth, etc.

Finally, by looking at Web server logs for the pages of out-of-stock merchandise, you can see whether there's even an actual demand for these products. Sometimes you run out of products. That doesn't have to mean the end of your relationship with customers seeking those products. Be creative and you can use out-of-stock items to learn more about your shoppers and what they want.

Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena is now available. She can be reached at agutzman@internet.com

Reprinted from ECommerce Guide.

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