Lost Customers due to unavailability or more customers due to scarcity? How stockouts and scarcity information impact brand value and repurchase intention in the luxury industry

Arden, Christine M.; Steiner, Michael; Hoyer, Wayne D.

Abstract
Based on two experimental studies in the luxury industry, it has been determined that stockouts induce conflict which, in turn, negatively influences brand hedonic value and, ultimately, future brand repurchase intention. Conflict is attributed to the brand as customers believe that the manufacturer is at fault for stockouts. However, it is also demonstrated that conflict due to stockouts is not likely to damage a brand’s reputation when selling limited editions as customers do not criticize the brand but, instead, themselves for delaying to make a decision. Contrary to the expectations, stockouts do not appear to positively influence a brand’s uniqueness value. The results indicate that stockouts not only have an immediate effect on sales but also negatively influence brand value and, as such, future brand repurchase intention. Communicating the limited availability of products seems to be an effective means to prevent damage to the brand’s reputation due to stockouts.