On Friday, May 21, online merchant 6pm.com, a sister site to Zappos.com, accidentally marked the prices of nearly all items on the website at $49.99. Over some 6 hours (from midnight until about 6 am PST) the website was taking orders for products (some of which were originally priced over $1,000) from customers. As a result, by the time they realized the mistake, they lost over $1.6 million dollars. The most fascinating part to me is not that though. What is especially noteworthy is how they reacted to this crisis situation.
On the morning of the same day Aaron Magness, director of brand marketing and business development at Zappos (which, by the way, wasn’t affected by the pricing mistake), wrote on Zappos blog:
…this morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95. …When we figured out the mistake was happening, we had to shut down the site for a bit until we got the pricing problem fixed.
While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million – ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers [underlining mine].
They even apologized “to anyone that was confused and/or frustrated”! And they will honor all purchases made during that time because it was their “mess up.” Simply exemplary handling of the uneasy situation! I hope that all the good PR they will receive from this will be worth much more than the $1.6 million they lost (or will it then be really invested?!)
The words “Shop. Save. Smile.” in the company’s logo have now been given a totally new meaning too.
Hi Geno,
Yes, I had a similar case on an Outlet Sale last year with Seagate Technology in the US: $75,000 in 45 minutes… Digital River covered the loss.
I have a simple question: how do merchants find high potential affiliates using competitors’ data?
Out of the Link Colon Strategy, do you have others to share?
Thanks,
Matthieu.
Matthieu, thanks for your comment. What exactly happened in your case last year, and why did Digital River cover the loss?
Regarding your question: yes, finding who direct-links to your competitors is one way. Also, those who promote your competitors through affiliate links + has the right targeted traffic. You may also find the following posts of help, Matthieu:
* Recruit Affiliates with Intelligence & Link Building Tools
* Improve Affiliate Recruitment with Google Alerts
* 5 Free Tools to Help You Find Affiliates
Thanks Geno for the links. A pretty complex question!
Regarding Digital River, they were coming from the a corrupted offer upload through their system.
A field was copied (i.e. the free shipping offer) and was imported as the product discount offer (i.e. 100% discount).
Their interface did not detect that, and still show the offer as a free shipping offer, even though it is giving 100% off the entire order. The Outlet Center Sale lasted 40 minutes before we identified the problem. This is why we got them to take the hit…
Wow! I hadn’t heard of this mistake, but am amazingly impressed with 6pm and, as an affiliate, this strengthens my commitment to them as a brand and will do more to promote them in the days ahead.
@Matthieu: Thanks for the full story. Good handling of the situation by Digital River there too.
@Carrie: Oh, absolutely! Gorgeous handling of the situation on 6pm.com’s part, no doubt about it.
@Geno: Thanks for sharing the 6pm.com story. Most retailers would say “sorry customers, not our problem.” But I’m not surprised to hear @zappos is doing the honorable thing for its customers. This has to be a PR goldmine.
Yes, very honorable of Zappos/6pm.com to honor their customers, no matter what. Thanks for your comment, Karl.