The Effect of Stockout Cause and Brand Equity on Consumer Preference in Online Retailing

Abstract

Customers can browse the information of stockout items in online retailing, thus change their preferences for the stockout product. This study tests the hypothesis that brand equity moderates the effect of causes of stockout on consumer preference for the online stockout product. The results reveal that for high-equity branded products, consumers exhibit a slit decrease in preference for the product whether the product is out-of-stock due to heavy demand or short supply. By comparison, for low-equity branded products, consumers increase preference for the product if the product is out-of-stock due to excessive demand and decrease preference for the product if stockout cause is supply-based. These findings highlight the importance of taking the product’s brand equity into consideration when stating different kinds of causes for stockout to consumers.