As a Shopify store owner, the last thing you want for your customers is their favorite item going out of stock. And no matter how much you try to avoid stockouts, they are bound to happen.
A research conducted by IHL says that retailers lose more than $1 trillion because of stockouts. In every one of their three product browsings, customers find the product they like to be out of stock.
And not just revenue, it hurts customer experience as well. And according to a report by the US Small Business Association, 91% of online customers do not engage with a brand after having a bad experience with them.
However, if you handle these situations properly, there’s not much to worry about. Even after a stockout, you can provide a good customer experience and keep your sales intact.
Let’s find out how.
What Is Product Stockout?
A product stockout is an event when some products are not available for customers when they want to buy them. It’s a byproduct of failed inventory management. And when you don’t have a strategy to handle such events, customers leave your store and turn to a competitor to get those products.
Common Reasons for Product Stockout
Before we jump on to rectify the out-of-stock event, we first need to understand why it has occurred. Here are some of the common reasons for product stockouts:
- Surge in demand during sales: This case is a paradox. Being an eCommerce brand, you offer discounts on some products to get more sales. But in some cases, the number of sales reaches a point when you don’t have those products to sell. And this can be a bad experience for the customers who visit a product page after receiving the sale alert from you.
- Inaccurate demand forecasting: Keeping the unexpected surges aside, there can also be inaccuracies in demand forecasting. If you’ve underestimated the number of people who’ll want to have your product, the supply will be inadequate, leading to a stockout.
- Poor stock count management: When your actual inventory count and the numbers updated in the inventory management system are not in sync, there are high chances that your customers will find a product to be out of stock even when you have it. This discrepancy can either be because of a human error or a technical glitch in the system.
- Delivery and logistics issues: ECommerce businesses are heavily dependent on logistics. Let’s say you’ve ordered well in advance, but the delivery partner fails to deliver on the expected day. This is one of the uncontrollable events that can lead to a stockout.
Why You Should Not Hide Out-Of-Stock Products
One of the common mistakes many Shopify store owners make during a stockout is they hide the product completely. And it can appear to be a good option from a distance. If no one sees the product, there will be no disappointment.
But what about the returning customers who have wanted it for a long time? You’d make them feel that they’ve made a mistake and you never had that product.
What about the potential sales you could’ve generated had you let the product be visible? And what about lost customer data and their happiness with your brand? You miss out on these things if hiding the product is your solution for a stockout.
And if this is not enough to stop you from hiding sold-out products, here are some numbers. The average eCommerce conversion rate is just 1-4 percent. So, irrespective of how reputed and successful a brand is, only a tiny fraction of visitors buy something. By hiding the products, you further drop this conversion rate.
That said, let’s see some ways to handle a stockout without having to hide the product.
Ways to Handle Out-Of-Stock Products to Increase Sales Instead of Hiding It
Keep the Product Page Live
Many merchants fear keeping the product page live once it’s sold out. They don’t want their customers to come across products that they can’t purchase at the moment. So, on their Shopify store, they either unpublish the product from their account or set the product status to draft.
When you hide a product from your Shopify store using these methods, a 404 error is generated. And search engines (especially Google) hate this error. Moreover, if your campaign about that product is still live on Facebook or Instagram, the broken link might end up in account disablement.
Many successful D2C brands like BoAt don’t hide their products from the category page. They let the customers browse and find out the product that is sold out. When customers come across such products, FOMO kicks in. They feel the product must have been great to generate more sales. This feeling allows the eCommerce store to wait for the stocked-out products to get restocked.
So, the best solution is to keep the product page live for search engines and ads. Doing this will open the door to many other actions that you can perform to sell a product, even when it’s not in stock, like getting pre-orders, offering recommendations, etc. Let’s discuss more on these in the upcoming points.
Add a “Sold Out” Badge
Okay, so now you’re not hiding the product from the category page. But you still need to let your customers know that the product is not in stock. If you don’t leave a hint on the category page, then customers might pick an out-of-stock product and expect it to be in stock. This will make the whole situation even more disappointing for them.
To tackle this, you can add “sold out” badges on the product that is not in stock. It will help your store visitors quickly distinguish between what is available and what’s not.
Moreover, it’s quite easy to add a sold-out badge. You just have to add a custom CSS. Here’s a simple custom CSS you can try to achieve the results shown in the image below:
Set up a Back-In-Stock Notification Strategy
This is the core part of the whole out-of-stock situation to generate sales. It simplifies the whole confusion about whether to hide or display sold-out products.
When your products are visible, back-in-stock alert tools like Appikon allows you to replace the “Buy Now” button with the “Notify Me” button. If these visitors subscribe to receive the alert, they’ll be sent an automated message as soon as the product is restocked.
Moreover, Appikon Back in Stock — Restock Alerts gives your customers an option to receive the alert on the channel of their choice (SMS, Email, Messenger, and WhatsApp). And when you leave it to customers to decide where to receive the alert, the opening rate of the message increases, which improves the conversion too.
Zalando, a fashion eCommerce store, has kept their back in stock strategy pretty simple. When a product goes out of stock, they replace the “Add to Cart” button with the “Notify Me” button and collect the email and specific details of the product (color, size, etc.). As soon as the product is restocked, customers receive a message about it.
This way, Zalando is able to capture the intent of buyers and make sales that they would’ve lost otherwise. And the customers also feel that the brand cares enough about them to bring back a stocked-out product and inform them when it’s back.
Set up Pre-orders for Stocked-Out Products
Setting up a back-in-stock alert brings sales, but not immediately. You still have to wait till the time you’ve restocked the product. And by that time, some interested customers might lose interest in the product. To counter this, you can set up a pre-order for stocked-out products.
A pre-order is an order that your customers can place even when the product is currently out of stock or has not been launched yet. However, they are shipped only when you reload the inventory.
Pre-orders improve customer satisfaction too. More than 60% of the customers who find the product to be out of stock are still ready to buy from the same merchant. Therefore, giving them an option to pre-order works in most cases.
Now, when you take a pre-order, the delivery for that order is always going to be late compared to your regular order. It’s because first you have to restock the products and only then you’ll be able to ship them. Therefore, you must provide your customers an expected shipping date on the order page itself so that they are not annoyed later.
That said, setting up pre-orders not only secures some sales but also helps you in demand forecasting, which is a very critical factor for avoiding out-of-stock events.
Be Precise and Clear About Out-Of-Stock Products
Out-of-stock products can be put into two categories — ones that you currently don’t have and others that you have discontinued permanently.
You must provide clear information to your customers about which of these categories their selected product belongs to. This will make it clear for them whether to expect the product to return or not.
Give Alternative Product Recommendations
Even if you have discontinued a product from your store, you should not immediately delete its page from your store. There might be some returning customers who came back looking for that product. This is where you should clear it for them that the product is never returning.
However, those customers will leave your store disappointed after receiving that information. To avoid it, you can offer them alternative product recommendations. By offering recommendations, you’ll make customers navigate to high-converting pages, which will definitely increase sales.
Offering product recommendations will not just improve the revenue but will also drop the bounce rate of your eCommerce store. Amazon uses this product recommendation strategy in one of the best possible ways.
Stop Hiding Out of Stock Products to Sell More
Setting up a back-in-stock strategy eliminates all the confusion regarding whether to hide the stocked-out products or display them. It simply allows you to replace the “buy now” with the “notify me” button.
Using Appikon Back in Stock Alerts, you can capture the purchase intent of customers by giving them an option to get a restock alert on the channel of their choice. The purchase intent you capture also helps you engage with customers via personalized content.
Install Appikon Restock Alerts today on your Shopify store.