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NATIONAL REPORT — Location is key when it comes to succeeding at convenience retailing, but so is having products in-stock for customers to buy once they get to the store.
New research from Carbonview Research, sister company of Convenience Store News, finds that 39 percent of shoppers experienced an out-of-stock situation at a convenience store, and half of them experienced it within the past two to three weeks.
"That's about four in 10 shoppers going into a convenience store and finding one of the products they are looking for out of stock. That's a pretty large number, especially when we consider these are occurring quite recently," Angela Roberson, director of research and analytics at Carbonview Research, explained during a recent CSNews webcast, entitled "Taking Stock: Understanding the Impact of Out-of-Stocks on C-store Customers."
Looking at specific categories, one-third of the shoppers surveyed said they were unable to find their preferred non-alcoholic beverage. Making matters worse, this is also the product category shoppers ranked as the most important for convenience stores to have in-stock.
Food, tobacco, and lottery tickets also ranked among the most important categories to be in-stock, Roberson noted.
"The out-of-stock experience is in direct conflict with the idea of convenience," she said. "Things that are going to be convenient are quick, easy, and on hand."
Out-of-stock situations have an emotional impact on consumers, who either have to settle for a product they didn't enter the store to buy, or go to another store to find the product they want.
Two out of three shoppers surveyed reported some type of negative impact. Reported emotions included: annoyed, upset, sad and disappointed.
Carbonview also conducted a study focused on attracting women to the convenience channel, and according to Roberson, women said they did not visit convenience stores because their desired products weren't there or their options were limited.
When measuring a shopper's experience, those who encountered an out-of-stock item are significantly less satisfied, the research found. Specifically, 41 percent of shoppers who did not encounter an out-of-stock were satisfied with their last c-store shopping experience vs. 23 percent who did experience an out-of-stock. Shoppers experiencing an out-of-stock are less likely to recommend shopping at that c-store.
MORE FALLOUT FROM OUT-OF-STOCKS
In addition to not recommending that store, out-of-stock situations impact future store visits by the shopper. Of the consumers who experienced an out-of-stock, 29 percent indicated they stopped shopping at that store for a period of time.
Looking at a sample of 100 shoppers who experienced an out-of-stock, about 24 of them said they stopped shopping for a short period of time, a little more than three shoppers said they stopped shopping that c-store for a long period of time, and one shopper said they stopped frequenting that store completely.
"Every time this is occurring, you will lose one out of 100 shoppers who have encountered an out-of-stock," Roberson cautioned. "Over time, the number of customers you continue to lose is going to add up."
A majority of shoppers also do not purchase an alternative item when faced with an out-of-stock situation. According to Carbonview Research, 55 percent did not purchase another product. There are two main reasons: Shoppers want what they want, and there were no other items available.
"There is a lack of breadth in some of these categories if people are saying there were no other options available," Roberson said.
And the lost revenue is often not just for one item — 21 percent of shoppers went into the c-store for more than one item, but left without purchasing anything when they encountered an out-of-stock.
"If they are not getting everything they came in for, then they are not getting anything," Roberson noted.
As a result, competitors could end up reaping the rewards. Of those shoppers who didn’t find what they were looking, 51 percent went to another store. This included other c-stores (52 percent), supermarkets (13 percent), a discount chain (7 percent), dollar store (10 percent), and drugstore/pharmacy (9 percent).
"Worst yet, over two-thirds of those shoppers purchased multiple items from the competitor," she said. "When shoppers go elsewhere, the out-of-stock item sale is lost, as well as all the other purchased items at that time."
For a replay of the full webcast, click here.