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A/B testing by Instacart suggests that telling customers about stocking times can increase spending and decrease the proportion of items replaced or refunded.
October 03, 2024
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This article explores how providing online customers with information about high-stock delivery windows can reduce stockouts and increase customer spending. An experiment conducted by Instacart showed that this approach led to a 4.6% increase in average daily spending and a decrease in the proportion of items replaced or refunded. The study highlights the broader applicability of this strategy for various online retailers and its potential to improve customer experience and revenue.
Stockouts — when a customer wants to buy a product that’s not available — are the quintessential failure of supply to meet demand. According to one estimate, stockouts cost retailers nearly $1 trillion worldwide annually. Stockouts result in more than lost sales; they also drive negative customer experiences. This can discourage customers from returning to the retailer in the future, harm a brand’s reputation and customer loyalty, and even lead to higher operational costs.
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Do Yoon Kim is an assistant professor of business analytics at the Carroll School of Management at Boston College. His research interests include innovation, technology strategy, and digitization.
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Dmitry Mitrofanov is an assistant professor of business analytics at the Carroll School of Management at Boston College. He has advised companies in different industries and mainly specializes in retail and online platform research.
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New!
HBR Learning
Sharpening Your Business Acumen Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Sharpening Your Business Acumen. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Take your career to the next level by learning business and finance basics, and developing an enterprise mindset.
