In-store promotions help retailers, brands retain sales when desired products are out-of-stock
More than a third of U.S. adults recently polled by the consumer research company CivicScience said they reach for another brand’s version of a grocery when their desired brand is not available. An additional 19% said they skip the purchase altogether – preferring to wait until their next shopping trip.
Another 24% of shoppers said when faced with an out of stock product that they want they will go to another retailer to buy – which is good news for the brand manufacturer, but not the retailer.
Finally, according to CivicScience, 9% said they would buy a closely related product from the same brand – a win-win for the brand manufacturer and the retailer and a solution both partners can expand through a variety of marketing strategies.
Increase same-brand substitutions
One way to increase the percentage of consumer who substitute a product from the same brand for the missing product is to pre-arrange in-store promotions for similar items that will go into effect if there is a shortage of a popular product. This could include price reductions on similar items communicated though in store flyers or shelf-talkers.
Another option is for brand manufacturers to group coupon promotions by category in store circulators. This would educate consumers about potential substitutes under the same brand, and it would work particularly well with consumers who would leave the store empty handed and either buy the product at another retailer or wait until the next shopping trip.
These consumers, who CivicScience calls “grocery product loyalists,” make up 49% of the U.S. adults polled by the consumer researcher who said they had encountered an out-of-stock situation. They are more likely to be older than 45, own a home and be grandparents, according to CivicScience.
In-store couponing is a particularly attractive strategy for this group considering 29% of grocery product loyalists use coupons every change they get, which is about 12% more likely than other groups.
Loyalty rewards
Reward-based marketing is another option for reaching the 11% of consumers who have confronted a product out-of-stock and who are already predisposed to buying a substitute product from the same brand.
These “brand loyalists” tend to have incomes of $50,000 or less annually, and are more concerned with the perceived association with healthy eating, according to CivicScience. In addition, 34% of this group reports valuing a brand's social consciousness, which is 31% more likely than product loyalists and 79% more likely than non-loyalists. This means they prefer to buy products under the same brand, as long as they are still within their budget. Reward-based marketing can give them the extra boost they need to buy another product from the same brand, even if it is typically out of their price range.
These strategies also could work on “non-loyalists” – the 40% of people who have experienced an out-of-stock grocery and opted to buy another brand’s version of the product. Unlike the other categories of consumers, these shoppers are not concerned with the brand, specific product or company.
Rather, these consumers are 20% more likely to be Millennials, and only 9% of them value brand over price, according to CivicScience. Thus, coupons and sales likely will grab their attention when they are shopping for alternatives to unavailable products.
Factors driving new brand experimentation
Indeed, price or sales is the number one factor that drives new product experimentation, in general, CivicScience found. According to the same poll, 42% of respondents said price or a sale drives them to try unknown or lesser-known brands.
This was followed by 17% who said they try new things simply because they like to experiment, 8% who do so for ingredient quality or nutritional value, 4% because of a brand’s value and only 1% for great packaging. Replacing an out-of-stock product fell in the middle of the reasons, accounting for 9% of consumers, according to the poll.
