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Stockouts cause our loyal consumers to switch to competition brands.
The holy grail of Marketing is to create loyal consumers of our products, who have no intention of switching to competition brands. They would go to the shop, pick up our product without even looking at the competition brand, and use it.
It takes a lot of skill, time, effort and money to create and maintain such loyal consumers. Would you hand them over to your competition on a platter? It’s a highly destructive action which, I am sure, no team in their right minds will even think of.
However, we do exactly that when these loyal consumers go to the shop and find our product missing on the shelf. Some of them may go to another shop to find it, a few may come back later to check if it is available. However, if the stockout is persistent, they have no option but to try our competitors’ products. We have not only lost our loyal consumer, we have also given the competition a new trier, that too on a platter!
The cost of stockouts on our loyal consumer base is enormous. Our marketing efforts and spends have just gone down the drain.