Stockouts in a webshop, makes 63% of the Dutch customers leave the current webshop. Instead of buying there, the customer will purchase a similar product at a competitor. WICS Logistics is involved in a partner program(CATeLog), which is doing research on online shopping behavior. The program is created by several large companys, universities, software suppliers and delivery services. It is a large-scale collaboration which focuses on innovation within Ecommerce logistics. In the first of a series of blogs, we will investigate the influence of stockouts on your business.
The scientific research is executed in October 2014 by a doctoral student at the University of Amsterdam, in collaboration with the University of Twente. A representative number of respondents (1.100) cooperated with the research. All of these 1100 respondents have ordered something online in 2014. This means that the statistics are very recent. The most ordered categories are fashion and books/CDs/DVDs. For the other categories the statistics are not bad either. Look it at this point of view: Presuming almost 11 million online shoppers in The Netherlands, more than a million people bought garden products. For every industry there is a huge target market.
63% of the online shoppers leave the webshop when there is a stockout. And even worse: this consumer will buy at your competitor. You might think: this will differ from categories. This is assumption we did as well. But in the research the different categories showed just a small difference. This means that for every industry it is of great importance to have a proper stock management. The income class did not show a significant difference on stockouts as well. This was another presume we made before the research, because the price at competitors might be higher. The conclusion is that it is important to have a accurate stock.
Logistics & stockouts
If your business is managed well, you will not have many stockouts. From a practical point of view, we know that a lot of processes can go wrong, which can cause stockouts. Such as ordering a product too late, but also unforeseen circumstances. A product which is usually a slow-mover, receives a big order. The safety stock could be too low to immediately process the order. A proper Warehouse Management System (WMS) limits the stockouts based on orders in the past. By using intelligent algorithms, WMS could be of added value for your company.