Out-of-stock (OOS) situations are inevitable in retail, but their impact on shopper behavior often goes far beyond a missed sale. New research from Shopper Intelligence highlights how New Zealand shoppers react to these scenarios, offering grocery suppliers crucial insights into managing the risks effectively and minimizing lost revenue.
Why Out-of-Stock Reactions Matter
The common assumption that shoppers will simply switch to an alternative product is a fallacy. Reactions vary widely depending on the category, and the resulting actions often go untracked in sales data. Here’s a closer look at what happens when a product isn’t available:
- Shoppers May Switch Categories
In some cases, shoppers substitute their original choice with another category that fulfills a similar need. This is particularly true for meat and meal solutions, where substitution is straightforward.
Key Categories with Substitution Potential:
- Fresh Lamb
- Chilled Convenience Meals
- Mince
- Hot Chicken
- Fish
Supplier Insight: Make sure you’re always in stock in these categories – otherwise the shopper is very likely to not be too bothered about picking something else.
- Brand Loyalty Can Drive Store Switching
For certain products, loyalty to a specific brand or need is so strong that shoppers are willing to visit another store rather than compromise.
Categories Most Affected by Store Switching:
- Baby Formula
- Skin Care
- Cat and Dog Food
- Classic Beer
- Feminine Hygiene Products
Supplier Insight: Brand is absolutely king here – the shopper will be more than happy to leave the store to get their preferred brand. And if they have a good experience in this different store, they may well not come back.
- Some Purchases Are Deferred
For pantry staples and other non-urgent items, shoppers often defer their purchase until their next trip rather than opting for alternatives.
Categories Most Likely to Experience Deferred Purchases:
Breakfast Cereals
Pet Treats
Canned Baked Beans
Tea
Dishwashing Products
Supplier Insight: “Just-in-time” refilling is not just a retailer buzzword, it’s an actual thing in many shopper pantries and freezers. The level of comfort a shopper has with that concept is the important thing here – again, the next shop might not be the same store.
- Complete Category Loss Risks
Certain categories see shoppers opting out entirely when faced with OOS situations. This represents the greatest threat to a store’s turnover and customer retention.
High-Risk Categories for No Purchase:
- Frozen Desserts
- Ambient Convenience Meals
- Ice Cream Multipacks
- Chocolate Bars
- Baby Food
Supplier Insight: OOS in these categories are the worst thing for these basket builders. Being available equals generating revenue – being absent means no sale at all, not even a deferred one.
The Cost of Out-of-Stocks: Beyond Lost Sales
An out-of-stock experience can have lasting repercussions on shopper loyalty and retailer preference. For suppliers, understanding these dynamics is key to:
- Prioritizing high-impact categories where shopper loyalty is strongest
- Improving demand forecasting and aligning with retailer replenishment cycles
- Collaborating with retailers to create strategies that minimize OOS risks in critical categories
- Partnering for Solutions
By leveraging these insights, suppliers can take proactive steps to mitigate the impact of out-of-stocks and retain trust with their retail partners. Explore category-specific strategies to maintain availability and optimize stock management, ensuring a seamless experience for New Zealand shoppers.
Talk to the our experts today to explore your specific categories and drive growth in 2025.
View the November 2024 New Zealand Update PDF here.