Description:

This new report shows that out-of-stock rates for online purchases of consumer products in the U.S. are nearly twice as high as in-store availability. Potential lost sales could reach $17 billion a year globally because products are not available online when consumers want to buy them.

The report looks at online availability of baby care, fabric care, hair care, oral care, skin care, and shave care products at retailers in China, France, Germany, Japan, United Kingdom and the United States. This is one of the first studies on online availability after previous reports over the past decade studying on-shelf availability and its effects on consumer purchasing patterns. The findings should encourage retailers and brands to collaborate and enhance online availability in the fast-growing area of online retail.

Key findings of the online availability report include:

• The number of items that are available online (OLA) is 80 percent worldwide and 85 percent in the U.S. The 15 percent out-of-stock rate online in the U.S. is nearly double the out-of-stock rate of 8.3 percent for physical stores.

• Consumer reaction to out-of-stocks are quite different in the online sales compared to stores. U.S. consumers are more likely to remain on the E-commerce site and switch a brand or substitute an item within the brand, which the researchers dubbed “the Amazon effect.”. However, if a physical store is out of a product, the consumers are more likely to switch to another store to find the product.

• Worldwide, brands and retailers both suffer the adverse consequences equally when consumers do not find products available online. The report found that worldwide, 31 percent of the total loss is to retailers and 33 percent is to brands. In the U.S., retailers on average suffer 25 percent of the adverse consequences compared to 35 percent for brands when products are not available online.

The results of this first global study show that online availability (OLA) present substantial challenges to retailers and their suppliers of fast-moving consumer goods. The study finds what the authors say is a surprisingly large extent of products not available online as measured on online retail websites. In addition, the problem is exacerbated when retailers make a product digitally inaccessible by suppressing the online product page for technical or commercial reasons.