Any shopping mall Santa with even minimal professional training knows the fundamental rule: Do not ever give a child a guarantee that you’ll deliver a specific toy to them. Do not do it even when both parents are standing behind the child’s back wildly nodding yes at you. If Santa—dear, sincere Santa—somehow doesn’t keep a promise, the fallout is terrible.
I wonder if the inventory management folks at Target’s and Fry’s Electronics’ ecommerce sites had that fundamental rule in mind last Friday—Black Friday—when they were completing sales to customers on products the retailers didn’t have in stock to sell. The orders on items with incredibly low prices came in too quickly for accurate inventory management by the computer systems.
As a result, people were sent e-mail messages confirming their purchases, and then as much as two days later, sent another e-mail saying the first e-mail was mistaken. Customers had their accounts temporarily debited for expenditures on items they’ll never see. And perhaps worst of all, shoppers who were feeling mighty good about a particular retailer giving them the incredibly low price woke up to discover they’d missed out on other opportunities to locate special Black Friday prices for an item from their wish list.
What might a toy and game retailer do to avoid the negative fallout from unfulfilled promises to deliver wish-list items? One answer is to have failsafe inventory management. But let’s get real: If this problem occurred with sophisticated retailers like Target and Fry’s Electronics, it could happen from time to time for any supplier or retailer. While maintaining systems to continually minimize your out-of-stocks, also develop ways to make things right with the customer when you fall short.
Research findings from Stanford University suggest that the type of personality a store projects influences how customers respond to retailer errors. Some businesses are seen as daring and spirited, while others are seen as cautious and intellectual. It works best when you decide what personality you’d like your store or website to have and then carefully design advertising, merchandising, signage, staffing, and all the rest to strongly project that personality.
Three dimensions identified by the Stanford researchers play an important role in how consumers respond to retailer errors:
- Sincere or witty. To what degree do shoppers see you as honest? Wholesome? Cheerful? Teasing?
- Exciting or predictable. To what degree are you seen as daring? Spirited? Stimulating? Trendy? Responsible? Dependable? Persistent?
- Expert or inquisitive. In what ways are you seen as knowledgeable? Successful? Calm? Confident? Secure? Imaginative? Curious?
Toy and game stores with a sincere, predictable, expert personality are usually highly respected, but may have trouble keeping customers after a product recall, bad customer service, or out-of-stock incident. That’s because the target market members don’t like surprises when the surprises make it look like the retailer is inept.
On the other hand, with stores that have a witty, exciting, inquisitive personality, customers are ready for a reaction like, “We make shopping more fun because we offer the unexpected,” and, “We’re always learning so we can get better and better.”
Which mix of these three dimensions would distinguish your business in ways that are most profitable? What personality would work best for your business to have when out-of-stocks occur for hot-selling items?