Consumer Acceptance and Feelings towards Direct Mail Stockouts

Abstract

There is very little evidence on customers’ acceptance and feelings towards stockouts or inventory shortages in a direct mail environment. This research firstly examines customers’ reactions by evaluating their acceptance levels in situations where one or more products on their current order list were out of stock. Secondly, it assesses customers’ feelings when their desired product was out of stock at the time of placing their order, both at normal business times and sales promotion periods. Data was collected via 12,000 questionnaires which were conducted with the largest direct mail company in Australia’s natural health industry. The results are both statistically and economically significant. They revealed that many consumers accepted temporary stockouts and were quite prepared to backorder a product for up to two weeks. Many consumers, particularly those aged 45 years plus, also indicated high levels of understanding towards stockouts during normal business times, but showed significantly less sympathy during periods of sales promotions.