Date of Conferral

1-1-2011

Degree

Doctor of Business Administration (D.B.A.)

School

Management

Advisor

Karin Mae

Abstract

The lean inventory concept has been shown to streamline operations and improve efficiency in a retail environment. The negative side of the practice is that limited inventories increase the risk of stockouts, where a routinely available product is missing and the retailer is not able to meet customer demands. The purpose of this exploratory case study was to examine stockouts as an event and document their effects on changes in customer attitudes and behaviors. Guided by a constructivist conceptual framework, the research question explored how stockout experiences affected customers' purchasing behaviors and loyalty to brand and retailer. A survey containing both open-ended and categorical response elements was validated through a pilot study and used to collect data from 40 randomly selected participants shopping at a retail mall in eastern Pennsylvania. Data coding for qualitative data consisted of 3 sequential stages of open, axial, and selective coding into a priori themes. Categorical responses were employed in downward analyses that revealed patterns in the qualitative data. The results indicated that repeated stockout experiences decreased customers' loyalty to brand and retailer and caused customers to abandon both retailers and brand. Respondents indicated that stockout impacts can be buffered through improved inventory management and better customer service. Specific recommendations included monetary incentives, personal contacts, coupons, and item discounts. Results of this study will enable retailers to gain deeper understanding of how stockout affects customers shopping experiences and loyalty, and offer mitigation measures to improve both. Results will provide a positive change to both consumers and retailers, where shoppers will enjoy pleasant shopping experiences and retailers will maintain their competitive advantage through loyalty of their customer base.

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