A new study from Auburn University’s Harbert College of Business reported that consumers who buy online and pick up in store, a process known as BOPIS or click and collect, are more likely to be satisfied with substitutions for out-of-stock products when the item is a staple like ketchup or paper towels rather than an indulgence item like coffee or perfume.
“For products viewed as utilitarian or fulfilling consumers’ practical needs, retailers should use substitutes that have similar specifications, but are not necessarily the same brand,” said Dora Bock, associate professor in the Department of Marketing. “For products that are more hedonic or experiential, we see that consumers react somewhat similarly to substitutes that are either the same brand as the original order or [have the] same specifications.”
Bock conducted the study with Miami University in Ohio faculty members Yao “Henry” Jin, associate professor of management, and Monique Ueltschy Murfield, associate professor and director of the Center for Supply Chain Excellence.
Their paper, “Do as you say or I will: Retail signal congruency in buy-online-pick-up-in-store and negative word-of-mouth,” was published online Sept. 15 in the Journal of Business Logistics.
The popularity of BOPIS shopping for groceries, apparel, home furnishings, beauty items and other products accelerated during the past two years as some consumers chose to limit their outings in public.
“BOPIS grew over 500% in some industries,” said Bock, citing data from unified commerce leader Kibo, which helps retailers, manufacturers and brands engage their shoppers. “This increase is largely a result of the COVID-19 pandemic and more shoppers willing to try alternative shopping methods for health and safety reasons.”
In addition to the shift in shopping preferences, nearly all retailers, including Target, Walmart, Kohl’s, Kroger and Publix, experienced unprecedented supply chain snafus that resulted in product shortages.
Given the convergence of these two phenomena, their research has practical implications for retailers who offer BOPIS as an option to customers—namely their results provide new insight into how customers react to different substitutions and will play a role in demand and inventory planning.
“BOPIS out-of-stock situations happen, as inventory records are not always 100% accurate,” Bock explained. “Retailers who offer a broad assortment of products should understand customer perceptions of the product category, as it will impact the effectiveness and a customer’s satisfaction of a given substitute. Utilitarian product categories are easier to substitute than hedonic product categories.”
In the study, Bock and her colleagues addressed the dearth of research on how customers react to BOPIS shopping experiences when retailers run out of stock and make product substitutions on orders.
Drawing from the principles of signaling theory, they conducted a series of five scenario-based role-playing experiments. In one experiment, they asked more than 250 participants to assume the role of a customer whose BOPIS experience involved product substitutions; they then had the participants write online reviews of their experience. The researchers then used text analysis software to evaluate the participants’ reviews.
“We found that the type of substitute the retailer provides, whether it’s the same brand or similar specifications, will lead to different customer reactions of the substitute, depending on the customer’s motivation for purchasing the product,” Bock said. “If [retailers] care about spreading positive word of mouth, or reducing negative word of mouth, it is important [for them] to understand the customers’ motivation for purchasing that product [so they can] provide the most satisfying substitution.”
Bock and her colleagues are currently expanding their research to examine situations where retailers offer their customers other options in out-of-stock items purchased through the BOPIS method.
“We’ll look at how customers react to being referred to another nearby store or purchasing the item for delivery but delayed shipment,” she said.
Original source can be found here.
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