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Target Site Snafus Sink Sales, Says Target CEO

Written by Frank Hayes
February 29th, 2012

Target.com’s ongoing teething problems are showing up in the bottom line. On a February 23 earnings call, Target CEO Gregg Steinhafel said that during the critical holiday selling season in November and December 2011, the site’s weaknesses hurt comparable store sales—even though the site was no longer crashing the way it did during September’s Missoni Tuesday.

That suggests the fallout from all that lost learning during Target’s Amazon years goes a lot deeper than it earlier appeared. And any advantage in Target’s latecomer-to-E-tail status may have been lost in the struggle just to get the site working properly.

During the earnings call, Steinhafel confirmed that comparable-store sales were down 1 percent in early December, in part due to online problems. Was that because Target.com hurt those numbers, or did it help but not as much as hoped, asked one analyst. “Well, it hurt,” Steinhafel said. “It hurt the comp in the quarter, and the primary timeframe where it hurt the most was really in the November, first couple of weeks of December timeframe.”

He added, “Our traffic on the site continues to be very, very good. So we’re very encouraged about the fact that the guests still love coming to the Web site. What we were disappointed in was the experience once they got there, and so our conversion rates were not to where they had been in the past.”

A retail site that disappoints visitors once they’re in the virtual door, that can’t convert them to paying customers, is a site that has failed at its most basic job. And the fact that Target.com didn’t fall over during the crush of Black Friday traffic means that, by late November, the retailer had clearly gotten the basics right when it came to handling huge numbers of visitors.

It just wasn’t selling as well as it should have been.

Steinhafel didn’t drill down into specific problems—he just said during the call that Target was continuing to work on site stability, along with “navigation, speed, page loading, waiting and the overall experience.” That’s not quite everything (apparently everyone is still happy with the typeface and color scheme), but it’s close.

And whether Target has really solved the site’s selling problems still isn’t clear—there’s a whiff of misplaced optimism here. The E-Commerce learning curve that Target abandoned in 2002, when it turned over online operations to Amazon, hasn’t gotten any easier. Amazon doubtless seemed like a good idea at the time, but the price in lost learning has turned out to be very high.

Unfortunately, these are not just technical issues, any more than operating a brick-and-mortar store is just a matter of good lighting and air conditioning, printing shelf labels accurately and making sure POS systems work. That’s all necessary, just as Target had to learn what capacity management meant for online retail.

But more servers, better exception handling and bulletproof code will only keep the site up. There are still problems in Target.com’s site design that even perfect execution on the technical site can’t overcome.

For example, Target.com’s homepage still contains product images that might be clickable—or they might not be.


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