Teen-Focused Apparel Chain Turning Web Outages Into Sales Promotions

Delia's, a 113-store national apparel chain (stores in 33 states, almost all in malls), is trying to master finding the sales promotion silver lining inside various Web crash clouds.

On at least three occasions over the last several months, the chain's site suffered a non-trivial outage. It happens. But Delia's cleverly turned these outages into a marketing opportunity by sending an E-mail to all of its customers, where the chain apologized for the outage and offered to show its sincerity by offering free shipping on all products—but only for a couple of days, if that. It's almost as though this was a promotion that Delia's had always wanted to run and simply used the outages to make it seem more special.

When we first spotted this problem—on Nov. 29, 2011—the free site-wide shipping was for one day and the apology was, "We're sorry our site was slow yesterday." The second time—on March 1, 2012—the free shipping added that it required "no minimum purchase" for anyone who used the code "Oops" and that it was for four days.

The March message also said, "We're sorry. You might have experienced some difficulty while trying to shop our site. We apologize for the inconvenience. As a thank you for your patience, please enjoy free shipping." The third instance we saw—on May 31, 2012—showed the identical message from March, except that the number of days dropped to three and the code changed to "Oopsy."

This is far from the first time that a retailer has tried to put a marketing smiley face on a Web headache. When American Eagle Outfitters had a major outage last year—apparently with a bit of help from Oracle and IBM—the clothing site asked customers who visited during the outage to leave their E-mail address so they could be alerted when the site returned. American Eagle Outfitters' move was a nice touch, as it also increased its list of customer E-mail addresses.

The classic turnaround move goes to TJX, back during the legal cleanup from its massive data breach. As part of a court settlement (a part the chain had proposed), it "paid back" consumers whose data was grabbed by inviting them back to the store to spend more money at a big sale.

Delia's Web outages have been fairly rare, but spokesperson Jean Fontana said the company is preparing to move its site to a different third-party platform this summer.

Speaking of taking perverse pleasure in a retail function not performing properly, Delia's CFO David Dick recently told an investor's call: "We expect to recognize a giftcard breakage benefit of approximately $2.8 million in fiscal 2012" and "During the fourth quarter of 2011, we recognized a giftcard breakage benefit of $1.8 million compared to $0.2 million in the fourth quarter of 2010."

In other words, the chain is making a lot more money in that line item because people are being given Delia's giftcards, and then choosing to not use them and to instead spend more money to shop elsewhere. Is this really a champagne moment?

The common thread is taking something that is very bad for business—a site crash and prospective customers not using already fully paid for giftcards—and doing whatever can be done to make it seem like a good thing. And with Delia's, that extra cash from giftcard breakage and the sales boost from those free-shipping days could really be good things.

It's just important to remember that the chain would likely have made a lot more money had its site stayed up and those giftcards been redeemed. Then again, we should never poo-poo the good in search for the perfect.