4 min

Omnichannel commerce: What are the consequences of product unavailability?

After examining the causes of product unavailability in a previous article, let’s explore together the consequences of this issue for omnichannel commerce. These consequences are multiple and affect both a brand’s image and income, as well as its customers.

In an omnichannel context, the Order Management System (OMS) emerges as a prime tool to help retailers minimise product unavailability and its impacts.

The consequences of product unavailability

The effects of product unavailability are mostly negative, ranging from consumer frustration to a definite financial impact for businesses.

While there are specific cases where it is used strategically, such as luxury brands leveraging scarcity to create hype, in most cases product unavailability results in a negative customer experience, leading to:

  • Frustration: When a desired product is unavailable, consumers can feel frustrated, creating a negative shopping experience that reduces overall satisfaction.
  • Loss of trust: Repeated product unavailability can erode customers’ trust in a brand, making them question the company’s reliability.
  • Search for alternatives: Faced with product unavailability, consumers are likely to turn to competitors. This can result in lost sales for the company and a decrease in customer loyalty.

Product unavailability also has consequences for retailers, including:

  • Direct revenue decline
  • Damaged brand image
  • Reduced efficiency, both online and in physical stores
  • Decreased customer loyalty

Strategies to minimise product unavailability

Implementing an Order Management System (OMS) allows for the centralisation of stock and automation of order processes to minimise product unavailability. The OMS offers additional benefits, including:

  • Real-time stock tracking: By meticulously tracking stock levels, pending orders and delivery times, the OMS enables proactive identification of imminent stockouts and the implementation of preventive measures.
  • Creation of a unified repository: The system establishes a unified stock repository that encompasses all available stock data within the network (warehouses, stores, suppliers, distributors, future stock). This stock is then made available across all sales channels (stores, e-commerce, app, marketplaces, social media).
  • Integration of sales channels: With an OMS, orders from different sales channels are centralised, facilitating stock management and synchronisation to avoid shortages.

A closer look at Ship from Store reveals it as one of the preferred solutions to effectively overcome stockouts and generate additional revenue.

43% of consumers plan to increase online shopping in the next six months. At the same time, plans to increase shopping in physical stores dropped significantly, too, from 33% to 23%. Source: PwC’s February 2023 Global Consumer Insights Pulse Survey

Ship from Store leverages a company’s physical stores as preparation hubs for shipping online orders. Instead of managin all order processing operations in remote warehouses, Ship from Store allows businesses to utilise store inventory to fulfil online orders. This approach reduces product unavailability by using available items in stores to meet online demand, even when they are out of stock in the central warehouse. Simultaneously, Ship from Store enables stores to sell their stock even during low foot traffic periods. Through this omnichannel solution, customers have a better chance of accessing desired products while merchants maximise sales.

To assess the revenue loss associated with product unavailability, request your analysis now.

Further reading