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Black Friday Inventory Blowup Hits Target, Buy.com, Fry’s
Buy.com
Of the three retailers, Buy.com appeared to be the most responsive to consumer complaints about after-the-fact Black Friday order cancellations. As it began receiving angry comments relating to cancelled orders for a Panasonic 42-inch TV, the pure-play online retailer used its Facebook page to respond by ensuring embittered customers that their concerns were heard and that everyone who successfully ordered a TV would eventually get one.
In a statement, Buy.com Director of Marketing Jeff Wisot said customers who received cancellation notices after successfully placing orders were first told they would receive $50 giftcards. Apparently, Buy.com changed its mind about that deal and decided to do better.
“We’ve been working hard since Friday to ensure that everyone who actually placed orders will receive the TV,” said Wisot’s statement. “Buy.com is spending several hundred thousand dollars below our cost to ensure that each of those customers who still want the TV will receive it. Or if they prefer, they can keep the giftcard. We’ve been notifying each customer affected, and their account status should be fully updated by the end of this week.”
Editor’s Note:
Buy.com spokeswoman Elaine Ordiz said about 650 customers “ultimately benefited from this Black Friday deal,” which had the TV listed at $298. “Regarding the Panasonic Viera TV deal on Buy.com, we experienced a surge of customers on the page when the deal launched after midnight, and the product page received more than 220,000 page views alone on Black Friday,” she said. “Though we worked hard to obtain additional units, we unfortunately could not meet the overwhelming demand due to limited inventory.”
-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?