How to reduce stockouts in an e-marketplace business model? A case study of Mercadão

Abstract

Retailers have long been struggling to find effective strategies to reduce their stockout rates as well as the negative impacts of stockouts on their customers and on the business itself. Stockouts refer to products being unavailable at the point of purchase and previous studies have disclosed important stockout impacts, such as customer dissatisfaction and lost sales, respectively, and relevant methods to either prevent or mitigate customers’ negative reactions to stockouts. However, unlike retailers, e-marketplace’ operators do not own the partner stores’ inventory data and the literature lacks research on how these business models can reduce their stockout rates. This dissertation was carried under the form of a curricular internship at Mercadão, an e-marketplace owned by Fonte Online. Therefore, this research had the particular objective of identifying the current strategies implemented by Mercadão to reduce their most significant partner’s stockout rates – Pingo Doce’s – along with understanding what complementary measures can be employed to minimize stockout rates, as well as the measures to prevent or mitigate the negative customer reactions towards the occurrence of stockouts in their orders. To accomplish this goal, we adopted a case study methodology and data was collected through participant observation and secondary data analysis. Results suggested that the e-marketplace currently employs stockout reduction strategies, such as daily meetings, Pingo Doce’s instructions, the use of communication channels (WhatsApp) for reporting stockouts, and the Substitution Policy, which is a relevant and useful strategy to safeguard the emarketplace’s financial interests, as it reduces the percentage of lost sales. Furthermore, this research also suggests that the preventive strategy of communicating stockouts transparently on the website before the order’s submission, can positively influence customers’ reactions to these events, as it decreases the loss perception. Finally, further recommendations were made to address specific difficulties of this e-marketplace.

Date of Award	11 Jul 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Joana Machado (Supervisor)