Did Retailers Risk Damage to Their Brands Despite Hit Holiday Online Sales?

Amid e-commerce glitches and technology’s growing pains, retailers can still win the loyalty of customers. Here’s how.




Cyber Monday 2011 set a record for the most online retail spending in a single day: $6 million, as reported by comScore. (See more from Josh Sanburn at Time.) Further, as comScore details, the weekend before Christmas was the second heaviest weekend of online spending on record.

As e-commerce not only becomes easier and more pervasive than ever but more normal to the culture, it’s becoming increasingly accepted that any merchandise imaginable can be found online. That brings great business opportunities for companies who can defy geographical constraints to make their sales, and it creates a better environment for customers who can find whatever they’re looking for within a few clicks of a tablet.

But such rapid growth in technology can bring with it true growing pains. The modern “brick-and-mortar” retail experience has become what it has based on many years of growth and development, a luxury of infrastructure building that e-commerce hasn’t had. Sure, e-commerce still ranked as one small part of overall holiday sales this year, but online sales were in large part what was pushing a flagging economy.

That reality means that the demand from would-be customers is sometimes outstripping not only e-commerce inventory but, more importantly, the systems for managing the shopping traffic. A friend of mine was complaining on Facebook the week before Christmas. He had been so proud that he did all of his shopping a month ahead of time online from Best Buy for the holiday season. But, as the weeks flew by, he became increasingly nervous about getting the presents in his hands. Turns out, the inventory had been depleted, and Best Buy informed him in the days before Christmas that there were no presents to be offered.


Best Buy offered him an alternative, but it wouldn’t be able to be orchestrated until after Christmas. And all the apologies in the world didn’t make up for the fact that the present he’d carefully planned was now impossible to obtain and that he’d either be getting a second-best present or be putting an IOU under the Christmas tree for mom.

Turns out, my friend’s problem was widespread, as Mae Anderson with the Associated Press reported. As Anderson writes, “Some glitches should not be a surprise with such a massive surge in online shopping this year, analysts said, but there is a risk of a backlash.”

The Ford household experienced just such a controversy this year, in the post-Christmas buying festivities. My wife is a big fan of Christmas. And while I find those bendy little elves creepy and the eyes on the Christopher Radko ornaments somewhat disturbing, it seems post-Christmas every year brings at least four or five new ornaments into the fold (perhaps this year to replace the ones my two-year-old and I destroyed in our decorating efforts). With a 5-month-old and a 2-year-old, trips around the mall aren’t quite the fun stroll they once were. So she decided to take her ornament shopping online for the first time.

She started with Dillard’s and found an item she wanted, only to have them email after the order was placed to say that it turns out it wasn’t available after all. At Macy’s, she placed her order, only to have a few of the items in her cart disappear at checkout. And, at Saks, her order went through, and she even received an email notification. Then, almost a day later, she received an email that part of her order was canceled. When she looked through the details of the notification, though, it turns out that “part of the order” was actually the whole thing.

She was finally able to piece together a few ornaments she wanted (especially thanks to a MacKenzie-Childs site that actually had in stock what it showed) and remains vigilant about online shopping, but the experience underscored just how unprepared retailers are organizationally to handle the traffic. After all, you can tell if it’s on the shelf or not in the store; it’s a little more complicated with a virtual shelf, and a bad technical experience can lead to frustrated customers and damage to a company’s reputation, even if the sales themselves are growing exponentially.


These types of hiccups are inevitable as online sales grow so rapidly. And, while companies have to put major thought and effort into building up the systems and infrastructure to handle an e-commerce environment that will only grow more prevalent, retailers have to do more to think about how they handle customer service in a virtual world, to ensure that they don’t lose significant face with customers as they try to scale up to meet shopper demand.

It will be interesting to see what steps retailers take in 2012 not only to fix what went wrong in 2011 but to become more social, more empathetic, and more proactive in managing issues with customers when things go wrong. Just as companies scale up their e-commerce infrastructure leading into the holiday season, perhaps they need to put more thought into scaling up real, human service and follow-up as well. Because things will inevitably go wrong in the 2012 holiday season, since it’s almost certain we’ll see even further growth in e-commerce in the coming year.

Perhaps the single most important thing retailers can do to prepare in 2012 is to put deep thought into the experience customers are having. Not just in making the site easier to navigate but to actually put themselves in their customer’s shoes and think about what it looks like and feels like to have your order canceled, or delayed, or the other range of problems customers might have.

An “audience experience” way of thinking has become a major focus for us at Peppercom and one we are going to devote a lot of time to in 2012, both in how we approach our everyday work with current and potential clients and in consulting services we offer to help companies think this way for themselves.

For my wife, Dillard’s and Macy’s did no follow-up for the errors in her shopping experience. Saks sent 10% off as an apology. How do companies communicate their desire to make e-commerce a pleasurable experience, and how do they demonstrate a human and emotional response when things don’t go as the company would hope? This is the role a good employee plays in the store. But many companies haven’t quite figured out how to take that human connection social. That means more than just responding to a disgruntled customer who tweets at you. It means meeting the customer where they are at. And, above all, it means putting empathy at the center of the organization.


Sam Ford is Director of Digital Strategy for Peppercom Strategic Communications, a Futures of Entertainment Fellow, a research affiliate of the Program in Comparative Media Studies at MIT, and an instructor with Western Kentucky University’s Popular Culture Studies program. He was recently named 2011 Social Media Innovator of the Year by Bulldog Reporter. He is co-editor of The Survival of Soap Opera with Abigail De Kosnik and C. Lee Harrington and co-author of the forthcoming book, Spreadable Media with Henry Jenkins and Joshua Green. Follow him on Twitter @Sam_Ford.

About the author

Sam Ford is Director of Audience Engagement with Peppercomm, an affiliate with both MIT Comparative Media Studies/Writing and Western Kentucky University, and co-author of Spreadable Media (2013, NYU Press). He is also a member of the Board of Directors of the Word of Mouth Marketing Association and a board liaison to WOMMA's Ethics Committee