Factors influencing customers’ switching behaviour during out-of-stock situations in Malaysian retail stores

Abstract

The persistent and increasing occurrence of out-of-stock products has cost the retailing industry a significant loss in profits. It is understandable that consumers practice switching behaviour when a certain product offered by a particular retailer is out-of-stock. Running out-of-stock is caused by many factors and the retailer inventory management system to address this problem partially depends on the consistency of upward suppliers. This means that retailers cannot entirely control when they run out-of-stock. In this study, the theory of planned behaviour (TPB) is used to explore the change in customers’ switching behaviour during out-of-stock situations. On top of the TPB constructs, customer loyalty was utilised to strengthen the model proposed in this study. The data was collected by self-administrated questionnaires distributed to 264 respondents in Klang Valley, Selangor. The constructs attitude, subjective norms, perceived behavioural control and customer loyalty were determinants of customers’ switching behaviour during out-of-stock situations. Subsequently, factor analysis was conducted to ensure the validity of the instrument. Afterward, a multiple regression analysis was used to test the study’s hypotheses. The findings demonstrated that the proposed framework is appropriate in exploring customers’ switching behaviour during out-of-stock situations. Three out of four proposed factors showed a significant effect, namely subjective norms, perceived behavioural control and customer loyalty. However, attitude did not have a significant effect on customers’ switching behaviour. The findings enrich our understanding of the out-of-stock phenomenon and provide valuable insight to managers and marketers in the retailing industry to control some of adverse outcomes of out-of-stock products in Malaysia.