In 2021, online sales in the U.S. jumped by 40% year-over-year, driven by the growing demand for immediate availability and seamless shopping experiences. This surge in eCommerce highlights the importance of a robust backorder policy to maintain customer trust and satisfaction, particularly for stores using platforms like BigCommerce. A well-defined policy ensures that customers can still purchase items even when they are out of stock, helping to retain their loyalty and encourage repeat business.
Understanding Backorders
Backorders are an important concept in eCommerce, particularly for BigCommerce stores. When products go out of stock but customers still want to make a purchase, a backorder policy comes into play. This policy helps manage customer expectations, ensuring that even when items aren’t immediately available, customers know what to expect and when to expect it. In fact, during the COVID-19 pandemic, the U.S. saw a 172% increase in out-of-stock items, highlighting the importance of effective backorder management to keep sales steady even during supply chain disruptions.
What is a Backorder?
A backorder happens when a customer buys a product not currently in stock. The product is expected to be available later, and the customer is willing to wait for it. This practice allows stores to continue making sales even when they don’t have the product on hand.
Here’s what happens in a typical backorder situation:
- Customer Orders: The customer sees that the item is out of stock but available for backorder. They decide to purchase it anyway.
- Payment: The customer pays for the item, often knowing that there will be a wait before it’s delivered.
- Shipping Later: Once the item is back in stock, the store ships it to the customer.
A well-managed backorder policy makes sure that the customer knows exactly what to expect. This transparency helps in keeping them satisfied while they wait for their order.
Common Causes of Backorders
Backorders can occur for various reasons. Understanding why they happen is important for managing them effectively.
Some common causes include:
- Unexpected Demand: Sometimes, a product becomes more popular than expected, leading to a stockout.
- Supplier Delays: If suppliers fail to deliver on time, it can cause backorders. A McKinsey report noted that 97% of companies had to increase inventories, switch to dual sourcing, or regionalize their supply chains to mitigate such disruptions.
- Production Issues: Problems in manufacturing or production can also lead to delays in availability.
When a backorder policy accounts for these possibilities, it helps in managing customer expectations. By addressing the root causes, stores can reduce the number of backorders and keep operations running smoothly.
Key Elements of an Effective Backorder Policy
A good backorder policy has several key elements that ensure a smooth experience for customers. These elements help in keeping customers informed, offering them flexibility, and ensuring they have control over their orders. Let’s look at these important parts.
Clear Communication
Clear communication is essential in any backorder policy. Customers should always know what to expect when they place a backorder. This means being upfront about delays and providing timely updates.
Here are some ways to ensure clear communication:
- Order Confirmation: Send an immediate confirmation email after the order is placed, explaining that the item is on backorder.
- Regular Updates: Keep customers informed about the status of their order with regular updates, especially if there are any changes in the expected delivery date.
- Estimated Arrival Time: Clearly state the estimated time when the product will be back in stock and ready to ship.
When you communicate well, customers feel valued and informed, making them more likely to trust your store and return for future purchases.
Flexible Payment and Shipping Options
Flexibility in payment and shipping is another important part of a strong backorder policy. Customers appreciate having options that suit their needs, especially when their order might take time to arrive.
Here are some flexible options to consider:
- Pay Now or Later: Allow customers the choice to pay at the time of ordering or when the item is ready to ship.
- Shipping Methods: Offer various shipping methods, including express and standard shipping, so customers can choose what works best for them.
- Free Shipping for Delays: Consider offering free shipping if there is a significant delay in the backorder, as a way to compensate for the wait.
Providing these options makes the shopping experience more convenient for customers and shows that you care about their satisfaction.
Option to Cancel Backorders
Giving customers the option to cancel their backorder is a key part of a customer-friendly backorder policy. Sometimes, customers might change their minds or find the product elsewhere, and they should have the ability to cancel if needed.
Ways to manage cancellations include:
- Easy Cancellation Process: Make it easy for customers to cancel their backorder directly from their account or through customer service.
- No Fees: Avoid charging any fees for cancellations, as this can discourage customers from shopping with you in the future.
- Automatic Refunds: Ensure that customers receive a prompt refund if they choose to cancel their order.
By allowing easy cancellations, you reduce frustration and build trust, ensuring customers feel secure in their shopping experience with your store.
Leveraging Technology for Backorder Management
In today’s eCommerce world, using technology is key to managing backorders effectively. By implementing the right tools, businesses can keep track of inventory, inform customers promptly, and ensure a smooth ordering process. This section will discuss how to use technology to improve your backorder policy and keep your customers happy.
Inventory Management Tools
Managing inventory efficiently is the first step in handling backorders. With the right tools, you can keep an accurate count of stock levels and anticipate when items will be out of stock.
Here’s how inventory management tools can help:
- Real-Time Tracking: These tools allow you to monitor your inventory in real-time, so you know exactly how much stock is available at any given moment.
- Demand Forecasting: Some tools can analyze past sales data to predict future demand, helping you avoid backorders by ordering stock ahead of time.
- Automatic Reordering: When stock levels reach a certain point, these tools can automatically place new orders with your suppliers, reducing the chances of running out of popular items.
Using inventory management tools as part of your backorder policy ensures that you can respond quickly to stock shortages. This keeps your customers informed and satisfied, as they won’t have to wait too long for their items to be back in stock.
Automating Customer Notifications
Keeping customers informed is a crucial part of managing backorders. Automating notifications helps ensure that customers receive timely updates about their orders, reducing any potential frustration.
Here are ways to automate customer notifications:
- Order Confirmation: As soon as a backorder is placed, an automatic email is sent confirming the order and explaining the expected delivery timeline.
- Status Updates: Customers receive automatic updates if there are any changes to the delivery schedule or if the item is back in stock sooner than expected.
- Restock Alerts: Customers who opted to be notified when an item is back in stock will automatically receive an email or SMS alert.
By automating customer notifications, you make sure that your backorder policy includes clear and timely communication. This automation reduces manual work and ensures that customers always know the status of their order, which can enhance their overall shopping experience.
Best Practices for Handling Backorders
Managing backorders effectively is essential for maintaining customer trust and satisfaction. By following some best practices, you can turn a potentially frustrating situation into a positive experience for your customers. Let’s explore how to handle backorders with excellent customer service and thoughtful alternatives.
Customer Service Excellence
Providing outstanding customer service is crucial when dealing with backorders. How you communicate and support your customers during this time can make all the difference.
Here’s how to excel in customer service for backorders:
- Timely Responses: Ensure that your customer service team responds quickly to any inquiries about backorders. Customers should not feel ignored or uncertain about their order status.
- Personalized Communication: Address each customer by name and personalize your messages. This small touch can make them feel valued and understood.
- Clear Explanations: Explain the situation clearly, including why the product is on backorder and when it is expected to be back in stock.
By focusing on customer service excellence, your backorder policy can help maintain customer loyalty even when things don’t go as planned. Good communication reassures customers that their order is important to you.
Offering Alternatives and Incentives
Offering customers alternatives and incentives is another great way to handle backorders. This approach shows that you care about their needs and are willing to go the extra mile.
Here’s what you can do:
- Suggest Similar Products: If a product is on backorder, offer a similar item that is available for immediate shipping. This helps retain the sale and keeps the customer happy.
- Provide Discounts: Offer a discount on the backordered item or on future purchases as a gesture of goodwill. This can turn a frustrating situation into a positive experience.
- Free Shipping: Consider offering free shipping on the backordered item once it becomes available. This can compensate for the delay and make the wait more bearable for the customer.
By offering alternatives and incentives, your backorder policy not only manages customer expectations but also strengthens their relationship with your brand. It turns a potential negative into an opportunity to delight your customers.
Why GritGlobal’s BigCommerce BackOrder is the Ultimate Solution for Your eCommerce Needs
To truly maximize the benefits of a solid backorder policy, using the right tools is essential. GritGlobal’s BigCommerce BackOrder app offers a complete solution for managing out-of-stock items while keeping customers happy and boosting your revenue.
Here’s why GritGlobal’s BackOrder app stands out:
- Automated Inventory Management: The app automatically manages your inventory, ensuring that customers are aware of stock levels in real-time.
- Real-Time Analytics: Get valuable insights into your inventory and sales, helping you make informed decisions and reduce backorders.
- Seamless Communication: The app ensures that customers are kept in the loop with automated notifications, reducing uncertainty and increasing satisfaction.
With BackOrder app from GritGlobal, your store can avoid losing sales due to stock issues. By integrating this tool, you can maintain a consistent and reliable shopping experience, keeping customers coming back even when products are temporarily unavailable.
Conclusion
Managing backorders effectively is a key part of running a successful eCommerce store. By implementing best practices in customer service and offering thoughtful alternatives, you can turn challenges into opportunities. With the support of GritGlobal’s BigCommerce BackOrder app, you can ensure a smooth experience for your customers, keeping them satisfied and loyal to your brand. For more information on how GritGlobal can help you with your backorder policy, contact us today!
