Best Buy Overpromises on Online Delivery
Hit by overwhelming demand for hot product offerings over Black Friday weekend, Best Buy alerted some customers just before Christmas that it would not be able to fill their online orders. On Best Buy’s online forum, some customers said their Christmas had been ruined.
Best Buy later apologized for the problem, which it led to less than one percent of orders that were canceled, according to the company. Best Buy also said it was providing electronic gift cards to affected customers as a goodwill gesture.
"What was wrong is that there was an unacceptable delay between order confirmations and cancellations, and for that we are very sorry," said Susan Busch, senior director of Best Buy’s public relations. Best Buy Inc., in an e-mailed statement sent out late in the day on Dec. 20. "It’s important to note that this was a rare situation based on a high volume of orders over a short period of time."
But customers vented their frustrations online. They particularly cited the long delay in response from Best Buy’s online customer service team. Some heard their order was back-ordered only to be told later it was outright cancelled.
Wrote "cynlu20" on Dec. 21, "To recap — after 19 days waiting and three hours transferred to a total of five different people, I have no gift to give my children for Christmas. Thank you Best Buy, for rewarding a customer who in the past three – five years has bought a laptop, refrigerator, dryer and countless DVD’s/CD’s through you by ruining my children’s Christmas. My new year will require a new washing machine, and I will no longer be considering Best Buy for this purchase."
Some customers accused Best Buy of committing fraud. They believed promises of hot deals — and ultimately non-delivery — only kept them from buying the same item from another store.
But some forum customers had mixed feelings after the Best Buy’s apology and gift cards.
"To Best Buy — thank you for at least trying to make it right even though you royally screwed a lot of customers this Christmas. It is not the gift that I wanted to give but I guess it is better than nothing," wrote WilliamE, who had an order for a limited edition BioShock 2 game for the Xbox 360 cancelled.
Another customer who had spoke to several reps was also more forgiving.
"Since I posted this initial thread the folks from Best Buy did eventually get back to me and I believe that with some work that we will get a resolution that I can accept. I am going to mark this thread as resolved. Best of luck to the rest of you still waiting for answers and help," "Wavelandscott" wrote on Dec. 23.
- Best Buy Customer Service Forum – Best Buy
- Best Buy Alerts Some Customers It Can’t Fill Online Orders – The Associated Press/The Wall Street Journal
- Best Buy Cancels Some Online Orders – The New York Times
- Best Buy issues statement regarding online order cancellations – Chain Store Age
- Best Buy struggles out of Grinch suit – CNET
Discussion Questions
Discussion Questions: Generally, how forgiving do you think customers are of online cancellations? Was Best Buy’s response adequate? What lessons should be taken away from this experience?
Accidents like these have always happened; it’s just that before, people couldn’t band together and gripe. Best Buy in particular seems guilty of the Netflix hubris of thinking that their screw up would “eventually go away.” I’m not sure this is a function of Best Buy being unable to predict their own necessary supplies (a biggie), that their distribution centers are disorganized (another biggie), or that it’s a brand being pulled apart by mobile and online discounters.
Whatever the reason, the lesson repeats like it has for BofA, GAP and as Verizon recently found out — that in this environment, nothing “goes away” when it is a brand talking to their customers.
While it’s not likely that Best Buy planned some sort of “bait and switch” maneuver, it leaves a disagreeable taste in its customers’ mouths. This is a failure on so many fronts: The worst offense is the lag time between order placement and cancellation. (At least Best Buy acknowledged this problem.) But it’s almost as negligent for Best Buy to have accepted orders in the first place — at narrow gross margins — that it was unprepared to fill.
Is the company’s inventory forecasting or IT management that bad? (Perhaps Best Buy hired the person that mismanaged the Missoni launch at Target in September.) An online apology and gift card is not going to rebuild trust in Best Buy anytime soon.
Obviously, at Christmas with gifts for others hanging in the balance, there is little forgiveness in the air when it comes to unfulfilled online orders. Under almost any other circumstance, I think shoppers would forgive and forget with the proper concessions from Best Buy. But it sounds like Best Buy dropped the ball in more than e-logistics; it appears they also were not trained and poised to handle the customer reaction, which surprises me a bit.
Going forward, I would think Best Buy would not only review their logistics and delivery systems to be able to handle the traffic holidays and big promotions generate, but also take a very hard look at how they handle disappointed shoppers. I have certainly made some mistakes over my marketing career, and some have turned into real relationship building opportunities if the disappointed shopper is handled with the TLC they deserve when problems occur!
What child isn’t greatly disenchanted when he or she finds out there really is no Santa Claus? And what customer wants to endure the disappointment of an online cancellation of a planned Christmas gift?
The lesson to learned is never to promise that which you might not be able to deliver. The broken heart has a very long memory.
The problem is less with the fact that they could not fulfill the orders (although one has to wonder about the accuracy of BB’s inventory systems at this point), it’s that it took so long to figure it out. It’s B-A-D.
Five years ago, Amazon did something similar to one of the editors of a major newspaper. He commissioned several pieces on the problem of missed promises.
Amazon obviously lived to see another day, but BB’s problems just keep piling up. The company has to take a cold hard look at itself. It is failing fast. Price transparency, poor customer service and now this? Doesn’t bode well. Reminds me a lot of Circuit City a few years ago.
They aren’t. While BB’s response was rapid and meaningful, they have basically tarnished their brand image. Balancing inventory investment and predicted demand is always challenging. However, not linking order taking with available stock is a big miss, particularly for a technology company. The lesson is to make sure you don’t take orders if you can’t fulfill them.
I had heard the news clips on this event and had hoped this article would shed more light on how the problem occurred. After 30 years of managing supply chain inventory applications, I know how difficult it is to properly control both multiple supply chains (direct and through the store) and a reserve inventory, whether it is reserved for the customer or sale merchandise to be sent to stores. Unfortunately it seems Best Buy has been less than forthcoming on what happened in this situation. I do agree with their email response that there was too much time between experiencing the problem and notifying the customers who were impacted, but that does not explain what happened.
In reading the background material, I was particularly taken back by the CNET comments. I assume CNET is heavily comprised of Best Buy’s target consumers. The acrimony expressed towards Best Buy by its target audience is very disconcerting. It indicates Best Buy likely has a bigger problem than this one event exposed. They really need to do some soul searching on how they’re going to remain viable in an online market place.
As far as the event itself, I find it hard to believe that the deep discounts for Black Friday were the root cause of the problem. If Black Friday exceeded their whole Christmas Season forecast, they have real problems with their forecasting systems. What I have seen happen more often (and especially in an environment where you support “order online and pickup at store”) is that merchandise intended to be reserved for later sale or pickup is sold a second time by an enthusiastic store employee or counted in a cycle inventory as available. In either case, the result is that when the time comes to deliver the goods to the original consumer, they are no longer available. This could also be why it was a surprise and customers were not notified until later.
As far as handling the situation, I think Best Buy has not been as open as they should have been after discovering the problem. Judging by all the comments, they could have helped themselves by practicing “full disclosure” in order to assure consumers that they know what went wrong this time and that it will be addressed. Instead, they have they have tried to compensate the effected customers, but not offered any assurance the problem will not occur again.
This will make many consumers think twice about buying from Best Buy. At least BB owned up to its mistakes and give some compensation to frustrated customers.
BB needs to do a better job of monitoring stock on hand and let consumers know when they are sold out. They should under-promise and over-deliver.
Unfortunately, this is another example of BB’s decreasing relevance in the marketplace.
Accidents happen and consumers are generally forgiving if the problem is handled well. However, Best Buy had promised delivery. Remember what happened to Toys “R” Us when they promised Christmas delivery and then had to cancel orders? Best Buys’ second issue is that it took so long to give consumers the news that they were unable to recover. Do you really think those consumers will ever trust Best Buy’s online delivery system? The promise of delivery by Christmas, the long delay in notifying consumers, and the publicity about the issue are a bad combination for Best Buy. Providing gift cards to a few consumers does not solve the problem.
Best Buy may be forgiven for being unable to correctly forecast the demand on some hot items but what it cannot be forgiven for is its failure in customer service.
As customers, we often feel that retailers are great at taking orders and payment, but not very good at handling problems.
It is just as important (and perhaps even more important) to manage problems and exceptions through your customer service as it is in managing your marketing and store operations.
Customers can forgive and move on if they are given enough time to react, however, in the examples provided in this article, it doesn’t appear that customers were given adequate notification and follow up, thus eliminating the chance for them to find the product elsewhere in time for Christmas.
They may forgive, but it’s unlikely they will forget. Will their forgiveness be enough to allow them to purchase from Best Buy again? Some yes, and some no. One of unknowns is how many other potential customers changed their mind to make purchases from Best Buy in the future.
I’m reading this story fresh off my own baffling Best Buy experience, after BBY shipped a printer to my store for me, then refused to let me take it home. (Long story. I left and bought a printer at Staples instead.) They really need to hire a Chief Customer Officer. If stories like this persist they’ll lose any trust the public might want to assign them.
This is a good example of a brick and mortar retailer not understanding the e-tail business. Unfortunately, it will hurt Best Buy for some time. The customers that were disappointed will not return. There are other alternatives no further away than one’s computer. Location, location, location gives no competitor any advantage.
The great advantage to e-tailer for the merchant is inventory control. It seems that Best Buy treated their inventory as cavalier as brick and mortar retailers treat store inventory. In e-tailing, the day the order is received, they know if it can be filled on time. That is if they think that is important.
Obviously, Best Buy did not. I would go further and suggest that online orders that were cancelled and cut could have been filled with in store inventory someplace in the in store system, but that never occurred to this retailer.
They are not going to be very forgiving. When Best Buy accepted the order, they made a promise to deliver. It is just like booking a seat on an airplane and having the airline oversell seats. Now you miss 2 days of your vacation or an important business meeting. How forgiving are you?
The only key will be how much compensation Best Buy is willing to give.
Best Buy has long been a disappointing retailer. I have endured several skirmishes with them and can attest to the fact that they will fight tooth and nail to avoid responsibility. Their policy regarding returns and “restocking fees” are onerous and not at all consumer friendly. They complain that they are a showroom for Amazon. Well, any consumer would choose to do business with a company who offers more variety, better prices and an honest desire to serve them.
No doubt they blew it, and I’m sure in the future they’ll cancel orders a lot faster. I do think their response was adequate, but adequate is no longer enough with social media and so many customer options now available.
But this isn’t going to hurt them in the long run. Unless you were one of the customers they failed to deliver on, you aren’t going to shop somewhere else because of it.
If even BB agrees the delay was “unacceptable,” who am I to argue? The only saving grace here was that it affected only 1% of orders — I thought it was practically all of them based on the news stories; of course to the unforgiving, that reads as “only” 1%, and once again highlights both the problems of scale and relentless media/social media coverage: it’s not just Santa these days who knows if you’re naughty or nice…everybody does.
A significant percentage of the disappointed customers will likely not forgive — or forget. If there is a sincere attempt to communicate with customers and a valuable gesture of good will, some may reconsider. But the apology must be sincere, timely and well executed. Leaving customers empty handed, after days of communications delays, will drive shoppers to think about other retailer options before the next purchase.
The most important lesson for BB is to communicate with all partners who are responsible here, from supply chain management, IT, store personnel, and drop the barriers between online and bricks and mortar venues. Time to rethink the current model and the customer experience it provides; many ways to improve. Best Buy has done many things well to achieve their current position, but their reach has exceeded their grasp here, and Amazon and others are watching closely.
People can say or write anything they want. Best Buy made several tactical errors that will take revenue from corporate coffers for repair work. A part of which will no doubt be put into replacing incompetent managers and executives.
Best Buy should look to responses identified with receipts for a means of measuring prospective damage and schedule an event to make amends to all effected. This is what is called damage control.
The degree to which customers are forgiving is generally directly proportional to the amount of proactive and timely effort on behalf of the retailer. All too often, retailers (and brands) mistakenly believe that no complaints or communication means that the customer has not become irritated enough! Big mistake! Online customers extend their trust and expect the retailers to treat them with more personal service than a brick and mortar shopper. This unfortunate situation at Best Buy is not unique and shows that retailers still have a way to go before their infrastructures, processes and workflows can keep the promises made by the merchants and marketing along with their IT departments.
Some customers that were impacted will not return. Some will take it on the chin and give them another try at a later date. Others that received what they ordered aren’t impacted and are likely not deterred by the incident. Consumers overall have a short memory when they are not affected.
Best Buy has more issues than this occurrence. There issues lie in the complete fragmentation of their marketplace. Everything they offer is available somewhere else and without any compelling reason to choose them over another they are in trouble. I see no compelling reason to choose them.
My personal experiences with buying things from them have not been pleasant. I have to believe that is the case for many others as well.
What do they have that makes them a first choice over all the other alternatives? Nothing that I can see or know of their offering. I recently purchased a stove in a pinch over the holidays. They didn’t even come to mind as an option. I never even thought of them.
Too many choices. Too many options. Too many places that have a deal that is better — much better.
Anyone remember Circuit City? Does that name bring Best Buy to mind along with their fate?
The problem in this particular case is that Best Buy has no room for error, especially online, with Amazon breathing down their neck.
I think customers will forgive an online cancellation. The problem was in the delay in letting the consumer know about the problem and not fully compensating the customer for the cancelled order.
If it was truly a small number of orders, BBY could have overcompensated (double the purchase price back) and turned lemons into lemonade!
The issue isn’t the mistake; it is the recovery.
I believe that customers can be forgiving of online cancellations, if the customer experience is right. What you find from Best Buy is a combination of poor follow through, arrogance and a shirking of responsibility that has cost the company in reputation, if not in actual performance.
Even Best Buy’s response was poorly worded and seemed to avoid them taking responsibility for their actions. The words “unavoidable situation” and highlighting the large volume of orders seems to be shirking the key message, which was “we made a mistake in our inventory, and then we made a mistake in not following up with customers fast enough.”
In social media, one key success factor is authenticity. Best Buy, for all their experience in participating in social media, seem to be trying to manage the information, rather than being bold, upfront and personal, which could have turned this situation into a social media success rather than such a challenge as it is.