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Target's under-stocked sale: Lessons not learned

Evan Schuman | April 24, 2015
In retail -- and especially in e-commerce -- there's a nuanced distinction between having a very popular sale and arranging for far too little merchandise. It's like those hold recordings that say the lengthy hold time is because of high customer call volume, prompting most people to mumble, "That and the fact that you're too cheap to hire enough call center operators."

In retail — and especially in e-commerce — there's a nuanced distinction between having a very popular sale and arranging for far too little merchandise. It's like those hold recordings that say the lengthy hold time is because of high customer call volume, prompting most people to mumble, "That and the fact that you're too cheap to hire enough call center operators."

That's E-Commerce Lesson #1. E-Commerce Lesson #2 is that the distinction between a site being down — having crashed — and a site that is responding very slowly is usually lost on shoppers. IT may understand the difference, but the consumer who can't make the desired purchase won't. Target this week relearned both lessons.

On Sunday, it launched a much-hyped promotion for Lilly Pulitzer apparel. The sale was intended to last weeks. In reality, it lasted hours. And during those hours, visitors to the site experienced some impressively slow site response.

Kathee Tesija, Target's chief merchandising and supply chain officer, posted a Target-written Q&A explaining her reactions to the incident. (Must be nice to be able to control both the Q's and the A's. Makes the A's so much easier.)

"We anticipated having enough product to offer the collection for several weeks, but at the end of the day, our guests let us know that they didn't need that much time to decide that this was a collection they wanted to bring home," Tesija penned.

Suspicions among Target shoppers have been running high. How could Target — which has extensive experience in such matters — have misjudged demand so wildly? The top suspicion: That Target planned this as an elaborate bait-and-switch, knowing that most shoppers would be hit with out-of-stock notices and could be persuaded to buy something, potentially at a higher margin.

The reality is that the Web  — and comments made to Tesija's post — spoke of a large number of copies of the Lilly Pulitzer products finding themselves on eBay and other resale sites, invariably at a huge markup. Tesija disputes this, saying that a tiny portion of products were being resold.

"When we look at the amount of Lilly Pulitzer for Target product being resold, it translates to roughly 1.5 percent of the collection," she said. "While we'd prefer that number to be zero, it tells us that the vast majority of guests who purchased the collection did so with the intent of enjoying it for themselves."

Part of the problem with that very precise 1.5%  figure is that Target didn't say how it came up with it. Was it done through a series of Google searches? If so, when was it performed? How much of the product was already resold before they checked? And not every site — especially not less reputable ones — are so easily found in a Web search.

 

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