Nothing beats having an item in stock. New research shows that brick and mortar retailers that need to backorder items to meet customer demand are losing out in the longer run.
Researchers from Northwestern and Tulane universities reviewed thousands of orders from a major U.S. clothing retailer and found that customers who purchased items on backorder spent 2.1 percent less in the following year than those who didn’t need to wait on their merchandise. Customers who had to wait 10 days to receive their backordered items spent 6.1 percent less in the year that followed and 4.6 percent less over a four-year period. The study said that reduced revenues tied to backorders equaled an annual loss of $25 million in profits.
