Best Buy Outage And The Downside To Merged Channels

Tools

When Best Buy wrapped up a planned 17-hour site outage on Wednesday (March 28), it came away with more than an updated E-Commerce system. The retailer learned the downside of tight merged channel integration and what happens when in-store becomes too dependent on online operations.

Years of improved online-offline integration has been great news for chains, but the level of day-to-day integration is now only keenly felt when that site disappears for the bulk of a day. Associates who are used to looking up information on the site, placing online orders for customers when inventory doesn't exist and using the site as a virtual catalogue suddenly found themselves having to rely on in-store systems.

What Best Buy did, though, is becoming more common. Just last month, it was Home Depot's turn. (Home Depot was down for 18 hours.) Best Buy's pre-announced journey into HTML darkness started at 10 PM (New York time) on Tuesday and ended right on schedule at 3 PM (New York time) on Wednesday.

As Best Buy's own FAQ pointed out, bestbuy.com has integrated itself throughout in-store, call center and, generally, all operations. "While the updates are occurring, customers will be unable to search or browse products, place orders or check order status on BestBuy.com, m.bestbuy.com (mobile or tablet), BestBuy.com/espanol and store kiosks," the FAQ said. Customers also "will not receive E-mails regarding orders while the updates are in progress" and checking order status—plus, of course, making online purchases—"will also be inaccessible to store employees, call center agents and online support representatives."

Although mobile sites were also down—more on that in a moment—Best Buy was able to keep about 14 of its sites operational. These sites seem to have no transactional functions and included GeekSquad.com, Best Buy Careers, Best Buy Investor Relations, MyRewardZone.com, Best Buy Community Relations and Best Buy Credit Card Account Management.

Stephen Baker, an analyst with the NPD Group, said few retailers have given much thought to the downsides of embracing merged channel. "As you more closely integrate Web systems and the store systems, the inevitable Web blowout is going to have more implications," Baker said.

One interesting part of the integration is mobile. There are two general ways to handle mobile sites and the easiest way is to have the mobile constantly grab and convert content from the Web site, with the mobile site being essentially a mirror of the core site. The second approach is to manage them as separate operations. The mirror approach is cheaper—no ongoing team needs to constantly populate the mobile content—and it makes it less likely that some product change will fall through the cracks.

The parallel approach, though, has the advantage of enabling customers to be able to do product research, find stores and at least access historical data. And, done properly, orders might be possible, ideally on a batch-and-forward approach. In the same way that in-store purchases during a power outage can be updated once operations are restored, a mobile site could operate as an emergency backup. This would be helpful during a planned outage—such as the one Best Buy experienced this week—but it could be a lifesaver during unplanned outages.

Admittedly, part of this approach would play to shopper psychology. A message such as the one Best Buy and Home Depot published, which essentially said, "We'll be down for almost a day and that's just the way it is. You can drive to a store or wait for us. Or maybe try Amazon," can be viewed as harsh.

But consider how much softer that message would have been had it said, "You can, of course, still place any orders with us and check on status via your mobile device." Even if few shoppers take you up on the offer, it will sound less like you're abandoning them.

Like the Home Depot situation, some are going to question whether a major site such as these really needs to be taken down for a planned upgrade. The counter, though, is that taking the site fully down might be a less risky approach than worrying about losing orders when the site is up and key upgrades are happening. The cloud can help—and Best Buy is aggressively experimenting with cloud efforts—but, ultimately, biting the bullet and shutting down for less than a day may be the safest near-term approach. Now if only the mobile sites could help out.