Handling The Spikes In Product Demand And Running Out-Of-Stock
Customer Experience, Customer Value Optimization, Guest Posts

Managing your customer relationships during demand surges and stock-outs

Retailers across the globe are witnessing a massive spike in online traffic and consumer purchases as they struggle to manage irregularities in inventory levels. 

The situation is dire as these retailers are missing out on approximately $1 trillion in sales because they are out of stock or the customers are dissatisfied, and thus unwilling to buy from them.

While these issues may not always be avoidable, clear communication with customers is key to ensuring that they don’t affect your business in the long run.  

Customers not only feel disappointed when you don’t have what they’re looking for, but stock-outs also prevent them from moving along your conversion funnel as loyal customers. 

So, how do you refine your store’s processes to offer prospective buyers the best possible customer experience?  

Let’s start with the basics.

When do sales surges occur? 

When preparing for demand surges, it helps to understand which events can trigger a hike in sales. 

For one, seasonal spikes like Thanksgiving through New Year see customers flock in for decorations, gifts, and fashion apparel. 

Unfortunately, other reasons for demand surges aren’t so easy to see through. Your marketing campaigns could generate an enormous amount of traffic to your online store – and the influx of customers can inflate the number of sales you make during that time. 

Consequently, large scale events like COVID-19 can also lead to panic-buying for products like toilet paper! With demand for staple items continues to soar without giving eCommerce merchants advance notice on when or how to prepare.  

However, regardless of the circumstances you’re in, it helps to be prepared. The following tips can help you manage inventory shortages and retain clients during a demand surge: 

Take a proactive approach to customer communication  

Make it a point to maintain close communication with your customers and alleviate concerns, especially in a time where supply does not equal demand. 

All out-of-stock items should have a clear disclaimer (“Temporarily Out Of Stock”) that informs the customer of its availability. You can even display out-of-stock items in black and white instead of bright, color displays.  

Offer to update them through text or email notifications once the product becomes available. Here, a follow-up message about the estimated availability date and a backorder option can help you secure their interest and avoid losing a sale to low inventory. 

You also have the opportunity to convert prospects who visited the unavailable product with a simple “We’re back in stock!” email that might spark their interest again.   

Engaging your customers throughout their relationship management with you will be essential to retaining them as paying customers. It might also be wise to offer them incentives for waiting until the product is restocked – especially in times you can’t estimate the availability date.  

Keep the page up

Displaying a 404 error on an out of stock item can ward off new customers instead of encouraging them to stick around longer – which is why you shouldn’t take the product page down. 

Consequently, 60% of consumers conduct their product research through one or more search engines before they can head to your eCommerce. SEO algorithms may even lower your ranking if your page is down for an extended period. 

If new inventory is on the way, keep the page going. Instead, consider moving them to the end of their product categories and search results pages. This will not only help customers avoid unavailable items, but also reduce the number of disappointed shoppers in your customer base. 

Better yet, you always have the option to increase the shipping time of out-of-stock products, so as long as you’re sure of restocking it well before your promised delivery. Ensure customers are clear about the shipping and availability of these products so that you can retain their interest and confirm their interest in the product. 

Demand Forecasting 

Retailers preparing for a sales surge need to know what inventory sells – and what doesn’t. 53% of businesses even say that predicting customer behavior is a useful strategy for their business

By diving into current and historical customer data, e-commerce merchants can identify patterns to identify your best and worst selling products.

If your website uses cookies, track the customer journey through your purchase funnel for greater insight into your consumers’ buying habits. Ask yourself: 

What new products receive the most pre-orders?

Are some market trends making a comeback?

Will current trends last long enough to stock up for the future?

Once you have actionable insights, stock up accordingly, ensuring that you order the right quantity of the right products to keep customers happy and make plenty of sales. The 80-20 rule is the safest way to go; it mandates that you should expect 80% of your sales to occur through 20% of your products.

Follow this conventional wisdom to help you estimate your inventory capacity and liquidate excess inventory that won’t sell. This way, you can avoid ordering too much stock – and mitigate the risk of running out on products.  

Tailoring product recommendations based on availability

If a product is out of stock, you must provide customers with personalized product recommendations to help them find a substitute for what they came to buy. 91% of consumers say they are more likely to shop with brands that offer relevant recommendations during their shopping than those that don’t.  

You will have products selling like hotcakes and adjusting current marketing practices in line with shopping behaviors is the way to providing customers with the best user experience. 

To that end, feedback surveys provide the most value in gauging a customer’s shopping preferences. 80% of consumers are even willing to share their product preferences and personal data to get tailored recommendations. 

Consequently, marketers can present relevant “You Might Also Like” options to visitors interested in out-of-stock items. These might be items from their wish list or products they added to the cart but eventually dropped. 

For example, you might be carrying the same product in a different color, which could entice customers to make an immediate purchase – instead of waiting till you restock. Ensure your recommendations are closely related to the out-of-stock item and can satisfy customers with the right alternative solution. 

Conduct regular stock counts

There is no doubt that modern inventory systems offer comprehensive insights into what is happening at the warehouse. But it is important that you also tally the reported numbers with what you actually have in store, just to be sure. 

Typically, you can do this through two methods of inventory checks – cycle counting and full inventory counts. Cycle counting involves counting small sections of your Stock Keeping Units (SKUs) or warehousing until you are able to cover the whole area. 

Alternatively, a full inventory count requires you to set hours aside to count every item in stock. Taking on this process may require you to hold off sales until the process is complete (usually a day and a half). 

Startups and small businesses that partner with fulfillment companies can request their inventory managers to conduct the count for them, especially if they’re looking to conduct a full inventory count and don’t want to close business for the day. 

Notify your customers beforehand, so that they can come back later and continue their shopping.  

In times of high demand, keeping tabs on your inventory can help avoid stock-outs and guarantee your inventory management systems are in line with your physical inventory count.  

Key Takeaway

If you’re looking to capitalize on demand surges, it is vital that you uphold customer communications so you can retain them while you do your best to maintain inventory levels.

Additionally, a reliable outsourced fulfillment provider can also help you make the most of a demand surge.

Sales spikes are great for boosting earnings through cross-sells and upsells – and the right CRM software can help you extend offers to customers when they’re almost ready to make a purchase. 

Are you looking for a way to retain customers and build their loyalty? Get in touch with us. Omniconvert is a Saas business that offers 2 types of tools: one for A/B testing, Web personalization, Surveys, Traffic segmentation called Explore and one for Customer Analytics called Reveal.

Would you like your clients stick to your brand? What about increasing your Customer Value? You’re in the right place.


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About the Author

Will Schneider is the founder of InsightQuote, a match-making service for B2B services, and writes informative posts about fulfillment services at Warehousing And Fulfillment. He is passionate about helping businesses find the right solutions to improve their operations. When not working, Will enjoys coaching youth basketball.

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