4 Best Practices to Turn “Out of Stock” into Sales Opportunities

February 4, 2025

January 19, 2025

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3 min read

Stockouts are a common eCommerce woe, costing businesses sales and damaging customer relationships. Imagine nearly $1 trillion left on the table! That's the staggering amount retailers are losing because they're not keeping up with what customers want, according to an IHL Group study.

But what if you could transform this negative experience into a sales opportunity? That's exactly what we'll explore in this article. We’ll provide actionable strategies to not only handle out-of-stock situations gracefully but also leverage them to boost customer engagement and drive future sales.

What exactly is a stockout?

In the eCommerce world, a stockout occurs when a product is unavailable for purchase at the moment a customer wants to buy it. These can be categorized into two main types:

Short-term out-of-stock: These are temporary hiccups in the supply chain. Perhaps a product is wildly popular and selling faster than anticipated, or maybe a logistical delay has slowed down restocking. These items are expected back soon so effective communication is really the key to retaining customers and their intended purchase.
Long-term out-of-stock: Unavailable products in the long run are usually a business decision not to restock the item. These can also occur when a product is discontinued or replaced with a newer version.

Regardless of the duration, stockouts can negatively impact your bottom line, customer satisfaction, and brand loyalty.Understanding the root causes and impacts of stockoutsBefore diving into solutions, let's understand why stockouts happen and their ripple effects on both businesses and customers.

What causes your products to run out?

Understanding why stockouts happen is the first step toward preventing them. Several factors can contribute to these frustrating situations, from unexpected spikes in demand to glitches in your inventory system. Let's explore some of the most common culprits behind empty shelves and disappointed customers. By identifying these root causes, we can implement effective strategies to minimize their impact and keep your products readily available.

Unexpected demand surges: Flash sales, viral marketing campaigns, and seasonal trends can trigger higher-than-predicted demand, depleting inventory rapidly. BFCM and year-end sales—aligned with Thanksgiving and Christmas—are prime times when shoppers are eager to open their wallets, making it crucial to stay ahead as inventory runs low.

Shopify merchants crushed it this BFCM weekend, racking up a record-breaking $11.5 billion in sales. That's a whopping 24% increase compared to last year.

Inaccurate demand forecasting: Underestimating product popularity is a surefire way to end up with empty shelves and disappointed customers. Therefore, having the right insights at your fingertips is of great importance for data-driven decisions.

For example, Boost AI Search & Discovery's advanced search analytics provide invaluable reports on top search terms, top clicked products in search results, and more. This real-time data helps you understand what your customers are actively searching for and clicking on. Then, you can proactively adjust your inventory strategy, ensuring you have the right products in stock at the right time.

Poor stock count management: Discrepancies between actual inventory and recorded numbers in your system can create phantom stockouts, showing items as unavailable even when they're sitting in your warehouse. This can stem from manual errors, technical glitches, or inadequate inventory management systems.
Delivery and logistics issues: eCommerce relies heavily on a smooth-flowing supply chain. Disruptions, delays, and unforeseen circumstances with shipping partners can all contribute to stockouts.

How do stockouts impact your online stores?

The most immediate impact of a stockout is the hit to your bottom line. Lost sales mean lost revenue, plain and simple. And it's not just the immediate sale that's at risk; you could be losing out on future purchases from disappointed customers.

Beyond the immediate financial impact, stockouts can seriously damage your customer experience. There's nothing more frustrating than finding the perfect product only to discover it's out of stock. This can erode trust and satisfaction with your store, leaving a negative impression. Unhappy customers are more likely to share their negative experiences, both online and offline. Negative reviews and word-of-mouth can be powerful deterrents for potential buyers, impacting your brand's reputation.

Frequent out-of-stock situations can chip away at customer loyalty. If shoppers can't rely on you to have the products they need, they'll likely start looking elsewhere. Building a reputation for reliability is crucial for retaining customers and fostering long-term growth.

Customers are likely to switch brands if their desired products are unavailable.

Finally, stockouts can even have an unexpected impact on your SEO. Hiding out-of-stock products can create 404 errors, which search engines don't like. This can negatively affect your search ranking, making it harder for potential customers to find you in the first place.

How to turn “Out of Stock” into sales opportunities

Now for the good news: stockouts don't have to be a dead end. By implementing the right strategies, you can transform these potentially negative experiences into opportunities to build customer relationships, gather valuable data, and drive future sales.

#1: Keep clear communication to avoid customer frustration

Honesty is the best policy, especially when it comes to product availability. Keeping customers informed builds trust and manages expectations, reducing the likelihood of frustration. For example, clearly stating “Temporarily Out of Stock - Expected back on July 25th” is much better than a simple “Out of Stock” message.

An example of excellent temporarily out-of-stock communication with estimated restock dates is provided. (Source: Baymard)

#2: Capture purchase intent using “Notify Me” subscription

The “Notify Me” alerts inform customers about restocks, creating a workaround for the dead-end stockout. Some similar approaches are wishlists and product-saving options. These all allow you to capture purchase intent and facilitate future sales.

Back-in-stock subscription. (Source: Digismoothie)

However, there is a significant difference.

Back-in-stock notifications are a subscription service. Customers simply sign up with their email or phone number and get notified as soon as a product is restocked. Wishlists, on the other hand, typically require users to create an account and log in to save items.Subscription for in-stock alerts is also versatile. Think about a limited-edition sneaker release – offering a "Notify Me" button generates a buzz for the product drop, maximizing day-one sales potential.

That’s why we are adding a Back-in-stock feature to our stack. Furthermore, our Back-in-stock subscriptions help you easily keep track of customer requests for out-of-stock products in the Submissions dashboard. The Subscribed Products section gives a clear view of your most in-demand items, which helps you make restocking decisions with data.

The “Notify me” button display is fully customizable, so you can create an on-brand design, ensuring a consistent shopping experience on your site.

#3: Generate revenue with Pre-Orders and Reservations

Pre-orders let customers secure temporarily out-of-stock items, ensuring they can still grab their desired product. This keeps shoppers satisfied and loyal to your store, reducing the risk of losing them to competitors. It’s a double win: generate immediate revenue while gaining valuable insights for demand forecasting. Customers get what they want, and you keep the sale.

To encourage pre-orders, offering some incentives is absolutely worth trying. Think of discounts, or flexible payment options like “buy now, pay later”. Transparency is also crucial: clearly communicate fulfillment and delivery timelines upfront so customers know exactly what to expect.

Boost's brand-new Pre-order feature makes all of this super easy! You can set discounts, choose payment types, and define your delivery policy in just a few clicks. It's all about empowering you to create a seamless and enticing pre-order experience that keeps customers coming back for more.

#4: Offer engaging alternatives to keep customers hooked

Just because a specific product is unavailable doesn't mean the customer journey has to end. Provide appealing alternatives to keep them engaged and potentially lead them to a purchase.

For instance, if a particular type of jeans is out of stock, suggest a similar style in a different wash or recommend complementary items like belts or shoes.Boost AI Search & Discovery, with its cutting-edge AI/ML technology, excels at this type of product recommendation. It's like having a super-smart sales associate working 24/7, ensuring every customer finds something they love, even if their initial choice is unavailable.

But we don't just stop at smart product recommendations. We take it a step further with personalized recommendations. This means we're not just suggesting similar items; we're tailoring suggestions to each individual customer's unique preferences and browsing history.

Boost AI Search & Discovery: Your Solution for Stockout Management

By implementing these strategies, you can transform the frustrating “out of stock” experience into a positive interaction, fostering customer loyalty and driving sales. With the right approach, a temporary setback doesn't have to be a lost opportunity.

‍Boost AI Search & Discovery offers powerful tools to help you rescue stockout situations. Our platform empowers you to implement pre-order campaigns, configure back-in-stock notifications, and personalize product recommendations. This ensures that even when a product is temporarily unavailable, you can still capture customer interest and drive future sales.

Install Boost AI Search & Discovery today and transform your stockout strategy from a challenge into a competitive advantage.

Ellie Ho

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Content Marketing Specialist

January 19, 2025

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3 min read

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4 Best Practices to Turn “Out of Stock” into Sales Opportunities

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