The influence of home shopping television network impulse buying on product shortages

Abstract

This study investigates the relationship between impulse buying and product shortages in the context of television home shopping. Home shopping networks adopt promotional tactics to pitch sales and even encourage consumers' impulse buying. Marketing and sales management often assume that home shoppers' impulse buying will increase sales and profits, not considering the possibility that a significant number of impulse purchases could be canceled or returned. In general, product shortages driven by consumers' impulse buying may create a phantom stockout condition whereas non-impulsive consumers are deprived of purchasing opportunities while products are in the process of being canceled or returned. This is the first large-scale empirical study that addresses the relationship between impulse buying and product shortages in a network retail context. Based on actual transaction data, a novel research plan is developed to measure the impact of consumers' impulse buying on the retailer's revenue and product shortages. The findings indicate that impulse buying may cause product shortages directly. We conduct a post hoc analysis to investigate the differences in the impact of impulse buying between newly introduced and existing products and between hedonic and utilitarian products. Based on the empirical findings, we provide managerial implications for home shopping network retailers.