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The impact of promotions on consumer choices and preferences in out-of-stock situations

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  • Diels, Jana Luisa
  • Wiebach, Nicole
  • Hildebrandt, Lutz

Abstract

Out-of-stock is a prevalent problem in retailing, particularly for promoted products. This research analyzes customers' substitution decisions in out-of-stock situations by accounting for the specific impact of promotions. The results of two studies demonstrate that substitution patterns are context-dependent and change contingent on the relative positions of the promoted and the respective unavailable product. Specifically, preferences shift according to a reversed similarity effect, which is, however, reduced for stock-outs of promoted items. If a similar substitute is on sale, the effect is increased. For promoted dissimilar substitutes, the effect is offset by the simultaneous occurrence of an attraction effect. The results lead to important theoretical and managerial implications.

Suggested Citation

  • Diels, Jana Luisa & Wiebach, Nicole & Hildebrandt, Lutz, 2013. "The impact of promotions on consumer choices and preferences in out-of-stock situations," Journal of Retailing and Consumer Services, Elsevier, vol. 20(6), pages 587-598.
    • Handle: RePEc:eee:joreco:v:20:y:2013:i:6:p:587-598
    DOI: 10.1016/j.jretconser.2013.04.009
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    2. Hoang, Dong & Breugelmans, Els, 2023. "“Sorry, the product you ordered is out of stock”: Effects of substitution policy in online grocery retailing," Journal of Retailing, Elsevier, vol. 99(1), pages 26-45.
    3. K. Sudhir & Nathan Yang, 2014. "Exploiting the Choice-Consumption Mismatch: A New Approach to Disentangle State Dependence and Heterogeneity," Cowles Foundation Discussion Papers 1941, Cowles Foundation for Research in Economics, Yale University.
    4. Azeem, Muhammad Masood & Baker, Derek & Villano, Renato A. & Mounter, Stuart & Griffith, Garry, 2019. "Response to stockout in grocery stores: A small city case in a changing competitive environment," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 242-252.
    5. García-Arca, Jesús & Prado-Prado, J. Carlos & González-Portela Garrido, A. Trinidad, 2020. "On-shelf availability and logistics rationalization. A participative methodology for supply chain improvement," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    6. Ezhil Kumar, Madhumitha & Sharma, Dheeraj P. & Tapar, Archit V., 2021. "Out-of-stock justifications and consumers’ behavioral outcomes– exploring the role of product type and sales level information in out-of-stock situations," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).

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