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Efficiency Gone Wild: Target’s Easy Way To Screw Up Prices

January 26th, 2011

But last week’s snafu created plenty of customer buzz for Target—all of it bad.

At Zappos, the pricing engine was too hard for the E-tailer’s staff to use. At Target, the software made it too easy to generate a new product page. There were, it seems, no approvals required, no final OK before the pages went live, no checks and balances.

And because the Target mistake was made on a Sunday afternoon, no one at the retailer moved to fix the problem until well into Monday. The pricing error that probably took half a second to create required almost a day to reverse out.

The E-Commerce lessons from this incident may seem obvious: Don’t let anything go live on your site without final approval. Monitor your E-Commerce site (and feedback about your site) for unexpected problems. Have a procedure in place to handle pricing weirdness that’s generated by out-of-control automation. Those aren’t exactly brilliant insights. And yet, somehow those controls weren’t built into Target’s systems and processes.

Yes, it’s true that you need some employees to be able to change online-store content without a dozen layers of approvals. But Target seems to have made it possible to make a mistake quickly—and impossible to spot or repair it anywhere near as fast. That’s the wrong way to do it. You want to make mistakes slowly, and fix them fast.

Now Target has another problem to fix: angry customers. No payment cards were charged, and all the customers received notification that their orders were canceled. But customers who complained through the customer-service chatbot on Target’s site got vouchers for $10 or $15 for their inconvenience. Naturally, those customers reported their experience on the same Web sites, discussion boards and Twitter feeds that originally spread the word about the pricing glitch.

Result: Customers who were already angry that they didn’t get a $39.99 PlayStation got even angrier that they didn’t get a voucher, either.

If Target’s PlayStation snafu sounds like a quintessential E-Commerce problem, it is. But if you think nothing like this could possibly happen in a brick-and-mortar store, just ask Best Buy. In 2009, a data-entry error put the wrong price for the Palm Pre smartphone into Best Buy’s POS system. Lots of customers walked away with new phones after paying $99 instead of $199 until the error was caught and corrected.

At least with E-Commerce pricing errors, the order can be canceled.


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