Does Travel Time to Stores Matter? The Role of Merchandise Availability

Retailers generally attract consumers to further locations by offering discounted merchandise. We suggest an alternative strategy is to increase the availability (or certainty) of finding the merchandise at their store (i.e., reduce stock-outs). We conduct three experiments to highlight that consumers view travel time more adversely when there is uncertainty about merchandise availability. We also demonstrate that the negative effects associated with uncertainty around merchandise availability and travel time can be mitigated through the use of in-stock guarantees.

Impact of stock availability and travel time on expected price.Figure optionsDownload as PowerPoint slideHighlights
► Retailers can attract consumers to more distant locations by increasing the availability (or certainty) of finding merchandise at the store (i.e., reducing stock-outs).
► The negative effects associated with merchandise availability uncertainty and travel time can be mitigated through the use of an in-stock guarantee.