Thoughts Of Holiday Retail Cheer Tempered By Memories Of Failure
It’s the big stage for retailers, the holiday shopping season – when all the consumer world is watching (and, merchants and payments providers hope, buying more than they did last year). Successes bring profit, bonuses and gilded reputations. Failures — well, they bring social media infamy and headlines, to say nothing of lost revenue, frustrated investors and, in some cases, the forced vacation known as unemployment.
And there will be failures.
In fact, the seeds of so many holiday season mishaps — web hiccups, shipping chaos, inventory gaps — have already been planted, and will respond in the right conditions (say, an unexpected surge in web traffic combined with sub-par hosting, or a winter storm for which adequate logistical preparations were not made).
That’s not to suck any cheerful anticipation out of the 2018 holiday shopping season, during which U.S. consumers are expected to spend at least $1 trillion, with eCommerce set for a 14.8 percent year-over-year increase, to $124.1 billion. Put the finishing touches on those late-year marketing plans. Do that supply chain triple check. Select those gourmet snacks for the company holiday party and, by all means, let your mind drift for a few minutes to how you might spend any bonus or raise you will earn for your Q4 triumphs.
Just don’t forget everything that can go wrong. And let these bad memories of holidays past guide you in the coming weeks to ensure that your retail and payments machine is running in top condition.
One of the biggest opportunities for holiday season failure is a site crash — or just a slowdown. No doubt, retailers have become more sophisticated about their traffic needs since the dawn of eCommerce, and since Cyber Monday became a really big deal: Adobe said Nov. 26 will bring online spending of $7.7 billion, up 17.6 percent from 2017.
A trip down the land of bad memories reminds us that even the most powerful can indeed be vulnerable.
It may seem like ancient history now — fair enough, as life moves faster in the digital age — but there are still people who probably grimace when thinking about that time in 2013 when Walmart’s website “crawled at a snail’s pace up to, and through most of, Black Friday, leaving many customers frustrated.” That year, Belk also fell flat on Black Friday, with “repeated crashes” leading to “lost customers,” and a reputation that was “harmed as frustrated customers flooded the company’s Facebook page to voice their opinions.”
One of the big differences between now and then? The rise of mobile commerce. But that doesn’t let retailers off the hook when it comes to making sure they can handle holiday traffic at all times.
Technology can also ruin the holiday party in other ways. Last year, “a credit card system glitch prevented Macy’s from handling credit and gift card processing both in-store and online from noon until early evening on Black Friday,” according to a report. “In addition to any lost sales on the day, Macy’s endured the wrath of social media and became retail’s lead story.” According to that report, Macy’s resolved the problem by early evening and blamed it on a “capacity-related issue.”
At least it wasn’t as bad as the payment situation in Russia during last year’s holiday season. (Not that you asked, but most of Russia, where the Orthodox Church is the dominant religious force, celebrates Christmas on Jan. 7. But New Year’s Day is an important holiday, and consumers in the country shop for gifts during the last weeks of the year.)
A general cash register crash caused, according to one report, “billions of rubles in lost sales.” An estimated 9 percent of the country’s retail market experienced the crashes. The government mandated deployment of the web-connected (and less than successful) cash registers in an effort to cut down on tax avoidance. Apparently, the problem was a software glitch, not a virus — though there remains at all times, of course, the threat of cyberattacks during this busy online season.
Shipping, too, is an area of constant risk. Weather can only be planned for, not controlled. Even though the U.S. Postal Service, along with FedEx and UPS, continues to make significant upgrades to handle the volume of packages produced by holiday eCommerce, every new season brings renewed questions about whether the overall system can hold. And the pressure keeps increasing on shipping providers, given the get-it-now mentality of consumers and the efforts of retailers to please them in a world where the delivery pace is set by Amazon.
Recently, for instance, Target said it would offer free two-day shipping without a minimum order until Dec. 22 on “hundreds of thousands of items.” And Walmart is not only expanding two-day shipping to more products, but striving to make returns easier — the returns process, after all, is as much of a holiday tradition these days as keeping the booze away from that one uncle who never really seemed right.
Holidays are a time to eat too much, renew acquittances, remember the departed and make lifelong memories (or to have the type of fun experiences best recorded on Snapchat than on Facebook). But for retailers and payments providers, it’s a time to bring out the best performance, and win the loyalties of consumers by doing well and avoiding mistakes.