US shoppers less than merry after e-glitches

NEW YORK/SAN FRANCISCO: Tom Nenon, a philosophy professor at the University of Memphis, is vexed with his online shopping experience at Best Buy, a sentiment shared by other US Internet shoppers this holiday season.

Just days before Christmas, he received an email from the top US consumer electronics chain informing him that his online order for a 42" Samsung TV will not be fulfilled.

“You can count on me not being a Best Buy customer anymore,” Nenon told Reuters on Friday, adding that he was disappointed that the chain tried to make him buy an older model at the same price as a replacement, rather than trying to make amends for its shortcoming.

Best Buy is not the only retailer causing problems online this Christmas. Other brick-and-mortar chains including Target Corp, Wal-Mart Stores and Barneys are struggling to keep up with online demand, an indication of poor execution by retailers during the biggest selling season of the year.

“Since Best Buy's website has always been a stepchild to the stores, it's gotten short shrift, and when they boosted Web demand by essentially matching others' Web prices, they got a bit overwhelmed,” said Craig Johnson, president of retail consulting firm Customer Growth Partners.

In an email, Best Buy spokeswoman Lisa Hawks said less than 1 per cent of Best Buy customers' online orders during the Thanksgiving weekend and the following week were affected.

“The challenges related to this situation are being addressed. We are very sorry for the inconvenience this has caused, and are providing e-Gift Cards to the affected customers,” Hawks said.

Other chains apologized for online ordering and fulfillment issues as well.

“We, at Barneys New York, are sincerely apologetic for any inconvenience that occurred while holiday shopping on barneys.com this past week. We are personally reaching out as quickly as possible to every customer who has been affected by this limited, but unfortunate, IT glitch,” Barneys posted on Facebook. A spokeswoman for the company did not return phone messages seeking comment on the nature of the problems.

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Biting off too much

In a bid to win shoppers from the likes of Amazon.com, many brick-and-mortar chains including Best Buy decided to offer free shipping this holiday season.

The decision certainly helped sales.

US shoppers spent $30.9 billion toward online purchases during the current holiday season, a 15 per cent increase from the year-ago period, according to comScore.

Still, experts think retailers bit off more than they could chew.

Target's website crashed twice in recent months, while some Wal-Mart Stores shoppers had trouble checking out online when its site went down briefly after midnight on Black Friday, the day after the US Thanksgiving holiday.

“Retailers have been surprised by how successful the holiday season has been online. Negative economic sentiment may have driven more people to the Web in search of better deals,” said Jordy Leiser, chief executive of STELLAService, which rates online retailer customer service.

“For some retailers, this was a good thing that turned into a very bad thing once it started affecting the experience of customers online,” Leiser said.

Only six of the 25 largest US retailers received top marks for online customer service, including website performance, between this year's November 25 Black Friday and the following Cyber Monday, according to STELLAService.

The result is a large number of disappointed online shoppers like Nenon.

“They don't understand the basics of customer service,” Nenon said of Best Buy. “I understand that things can happen. What bothered me is when they made a mistake, then they made no concessions to their customers to try and make up for it.”

Nenon's sentiment was echoed by a director of communications at a San Francisco tech company who decided to order his Christmas tree online from Target.com this year.

The shopper, who did not want to be named, received an email from Target saying the tree would not be delivered until very close to Dec 25. To top it off, Target did not let him cancel the order, but advised him to mail the tree back once it arrived.

The tree finally arrived via FedEx on December 21, but that was not the end of his worries.

“As predicted, FedEx dropped it off without knocking. So I had the added joy of getting the FedEx guy to come back and get it. And let me tell you, nothing screams holiday cheer like watching a grumbling FedEx employee schlepping a Christmas tree back into his truck,” he told Reuters.

The stories are bad news for retailers, industry-watchers said.

“The three pillars of retail are prices, product and experience. Best Buy sells a commodity product and has to price competitively, so the thing most in their control was experience. And now they've blown that.

It's another blemish for a management team that is starting to look like they've gone five rounds with Rocky Balboa ... and lost,” Trutina Financial Chief Investment Officer Patty Edwards said.

“People have a long memory. And when a retailer ruins Christmas by not delivering little Jimmy's present on time, they've placed themselves on the permanent 'naughty' list.”