Real-time stock updates lift sales, research shows
New research from Monash Business School reveals online retailers can substantially lift sales by showing customers real-time updates about their current stock levels and number of items sold.
The finding is based on an online study designed by senior marketing lecturers Yongfu He and Harmen Oppewal to test consumer purchase decisions when presented with real-time sales and stock data.
Published last month in the December 2017 issue of the American Journal of Retailing, the study measures the impact of sales level versus stock level information, product popularity, quality perceptions and brand familiarity on customer purchase decisions.
“We know from this study that when comparing sales and stock, sales information will be stronger than that of stock level information. But brand awareness moderates the effects and particularly reduces the stock level effects,” Dr He said.
She added that displaying sales and stock information can be an effective tool to influence consumer choice of a brand, but retailers should consider when to display either type of information.
The implications of the study are especially significant for online retailers, Dr He said, as online shoppers face more uncertainty about the quality of products on offer.
“Australian sites such as Ebay.com.au and groupon.com.au have a lot of stock information. Initially I was interested in exploring the impact this had on sales if you could see there were only a few items left and the number, such as booking hotel rooms when there are only two left,” she said.
But the insights are also of interest to offline retailers in terms of how to best start communicating sales and stock level information to customers.
Dr He said this is just the first in a series of studies that will look at the impact of multiple cues – such as price, online reviews and quality of photography – on consumer purchase decisions.