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Black Friday Inventory Blowup Hits Target, Buy.com, Fry’s
The bigger issue, though, is consumer missed opportunities. Had those unlucky consumers been told right away, “Sorry. We’re now sold out,” they could have potentially visited other Black Friday sales (from competing retailers) to try and buy the items. Even though there is no indication of any nefarious intent, consumers might be left with the feeling that the multi-hour delay was a deliberate bait-and-switch, designed to deprive them of the ability to shop a rival’s sale.
The irony behind this situation is that it reflects a maturing of the E-tail environment. These glitches could only have happened now that servers can effortlessly handle tens of thousands of simultaneous visitors.
It’s like a great line from a very early Lucille Ball TV show. Her son tells her that he has to stay after school. “For penmanship again?” she asks. “No, my penmanship is really good now.” She asks, “Then why?” He replies, “Now that the teacher can read my writing, she discovered I can’t spell.” Now that these sites can handle this intense a simultaneous load, merchants are discovering problems with inventory systems that were hidden by the site crashes of earlier years.
As in other cases on Black Friday—such as hiccups with Borders and an unusual price-match statement from Wal-Mart—how the retailers reacted to the inventory-checking problem is more important than the initial glitch.
Fry’s Electronics
Fry’s offered a $600 30-inch LCD television for $200. After receiving confirmation E-mails, cancellation messages were received some 18 hours later. Said one of Fry’s E-mails: “After running out of stock of the LG32LD350 32″ LCD HDTV, our Web site encountered a technical problem allowing your order to be accepted in error.”
One consumer who said she was caught in this headache was Mountain View, CA, resident Arundathi Gururajan.
She said she was able to order the unit at 11:06 PM California time on November 25 and received a confirmation E-mail from Frys.com that said the purchase went through but the TV was on backorder. Two days later, Gururajan found out at a local Fry’s store that the company was planning to cancel some of the online orders. “I started searching online and found that some people had been notified of their cancellation by the next day. Since I hadn’t heard anything, I assumed mine would be arriving after some time and let it be,” Gururajan said.
But the next day, she received an E-mail from Frys.com canceling her order. In the midst of an unsuccessful attempt to get Fry’s to “offer any sort of compensation, replacement item or anything,” Gururajan called her credit card company to ensure Fry’s was telling the truth about not charging her card.
Editor’s Note:
“My credit card company informed me that the charge had gone through on November 26 at 1:30 AM and Fry’s had received the cash for the transaction,” Gururajan said. “This was deceptive on the part of Fry’s. My card had been charged though they claimed it had not.”
Fry’s representatives did not return E-mails and voicemails seeking comment.
-Marc
December 2nd, 2010 at 10:21 am
In Brick and Mortar operations we called the time between customer selection and inventory update (ie. the time between the customer removing it from the shelf and the POS system deducting it from inventory) the “buggy factor”.
Something we all(should have)learned to address in warehouse and online systems long ago …..
December 2nd, 2010 at 11:29 am
This is NOT the first time that major retailers have included “doorbuster” black friday deals online. I have sucessfully purchased them online several times in the past. Fry’s has a history of “inventory glitches” on Black Friday year after year. More like, bait and switch to sabotage our competition.
December 2nd, 2010 at 11:29 am
Our warehouse software reduces the “on-hand” inventory and increases “committed” inventory when an order is placed, and then reduces “committed” and increases “pending” when the order is being picked. “Pending” is reduced when the order is shipped, and the sale is posted. If the order is canceled at any point, the quantity is “returned” to “on-hand”.
It would seem that using this technique would work for online shopping carts: “committed” means in the cart and “pending” means the shopper is checking out.
Perhaps the problem is that the software for managing website sales wasn’t designed by people with warehousing experience?
December 2nd, 2010 at 12:25 pm
Having managed a warehouse with only On Order/On Hand inventory, and no Work In Progress (WIP) flags I can’t begin to tell you the times that causes problems with overcommitment to meeting a customer’s needs, with the corresponding anger from both sales and the customer.
December 2nd, 2010 at 1:47 pm
These types of inventory “glitches” are much more common than the article implies. Doing a search for past snafus, you’ll eventually find many instances of these questionable practices where the customer receives nothing but poor treatment from the retailer. This is especially true with Frys.com.
December 2nd, 2010 at 5:16 pm
@Bob – Having to commit inventory when items are put in a online shopping cart is a bad practice as > 90% shopping carts are abandoned, and depending on the system, may not be reclaimed for up to several hours. That would lead huge opportunity costs. Additionally, it will allow a potential Denial of Service attack by someone adding a large amount of items in a cart and walking away from the browser.
December 6th, 2010 at 8:53 am
The more idiot retailers continue their gimmicks, the more they get burned. See what happens when people with IQ’s in the single digits try and think?
February 3rd, 2011 at 6:50 pm
isn’t this the same problem faced by vendors like ticketmaster for concert tickets? anyone who has ever bought tickets for a concert there gets the message, “complete your purchase in 3 minutes or else your seats get released.”
seems like a fairly easy solution, no?