Hiccups for Best Buy Are Humbug for Some Customers

No, Virginia, Santa Claus isn't Best Buy. One has a crisis, the other doesn't. Guess which is which.

If you guessed Best Buy, give yourself a Christmas cookie. You may have heard:

"The nation's largest specialty electronics retailer announced Wednesday that 'overwhelming demand for some products from Bestbuy.com has led to a problem redeeming online orders made in November and December.'


"The company apparently failed to anticipate a surge in online purchases following enticing online deals and was forced to cancel orders when it could not fill them. On the company's website, customers wrote on message boards about their experiences, titling their posts 'Best Buy Cancelled my Christmas!' and 'Bait, Switch, and THEFT by BestBuy.'" (http://bits.blogs.nytimes.com/2011/12/23/best-buy-black-friday/)

Best Buy apologized, blaming overwhelming demand of hot product offerings. It says less than one percent of orders were canceled, according to Susan Busch, senior director of Best Buy’s public relations.


“'What was wrong is that there was an unacceptable delay between order confirmations and cancellations, and for that we are very sorry,' said Busch, in an e-mailed statement. 'It’s important to note that this was a rare situation based on a high volume of orders over a short period of time.' She said that Best Buy was giving electronic gift cards to affected customers as a goodwill gesture."  (http://bits.blogs.nytimes.com/2011/12/23/best-buy-black-friday/)


Less than one percent, an apology, and electronic gift cards to affected customers. Is that good enough?

"Customers expressed their frustration in Best Buy’s online forums, with some parents asserting that the retailer had ruined Christmas for their children."  The word is out there to more than one percent of consumers.

"'It is a hiccup for the company,' Morningstar analyst R.J. Hottovy said. 'They were kind of behind the curve building out their online channel. They've done a good job investing in it, but if you make a lot of rapid changes, inevitably there are going to be growing pains.'"  (http://www.pressofatlanticcity.com/news/press/atlantic/best-buy-s-failure-to-fill-orders-lets-down-some/article_07218586-2dc5-11e1-a3d7-0019bb2963f4.html)

There was another hiccup. "It was Best Buy’s second online problem of the holidays: the company also flubbed a pre-Black Friday special for its Reward Zone Premier Silver loyalty program participants, angering some of its best customers, who were unable to check out and complete their Web purchases."  (http://www.nypost.com/p/news/business/best_buy_oops_it_our_bad_DMaTNoIEI74n506Os7cyBJ)

A hiccup isn't "a" hiccup. It's a series of events that can eventually become painful. Sometimes when I get hiccups, they go on and on until my chest hurts and I can't eat. Yes, Best Buy will emerge with its bottom line probably unaffected. But beware: Circuit City had hiccups that eventually put it out of business.

The part that bothers me most is, "The Minneapolis-based company has declined to specify how many orders are affected or which products are out of stock. The inability to fulfill some of those orders was unsurprising but also upsetting for the company, analysts said."  (http://www.pressofatlanticcity.com/news/press/atlantic/best-buy-s-failure-to-fill-orders-lets-down-some/article_07218586-2dc5-11e1-a3d7-0019bb2963f4.html)


Why withhold that information? A further consideration that makes me go hmmm: "To compete, Best Buy has expanded its online offerings, cut back on square footage in the U.S. by closing stores and sought to expand internationally."


Yet it wasn't ready for so many on-line sales. Holiday sales are 40% of Best Buy's annual business. It does little good to increase sales volumes and then not meet them. Plus it waited four weeks to tell customers they wouldn't receive their orders.  The retailer has to reassure its customers it is reliable. I would suggest, Best Buy, to hold your breath, take a drink of water, and eat a mouthful of peanut butter. All those things can help stop the hiccups.