Lessons from the HP Touchpad Firesale

Okay, I admit it, I was one of the people trying to get a 70% discounted HP Touchpad. I wasn’t alone, a work colleague queued up at the former Dixons Store (can’t remember what DSG are calling it this week) to get one last night.

Neither of us were successful. Like many people wanting a bargain both here and in the USA, we were disappointed. There are a couple more retailers who have yet to discount, but word is that their stock is pretty well non-existent too.

So what can we learn from this whole debacle? Firstly, £89/£115 is a really popular price point for a tablet. Sadly it’s not a realistic price point for a tablet, so unless someone uses a model like the console manufacturers and sells their hardware at a loss, it’s not happening again.

What is perhaps more interesting is the flaws it shows up in many of the biggest names in retailing.

The Dixons group started the rush, and whilst their site didn’t totally crash there were a number of annoyed potential customers who found products disappearing from their shopping carts before they could purchase.

Best Buy UK again kept their site running, but again customers had products disappear from their shopping cart – it happened twice to me.

Carphone Warehouse had their site drop off the Internet several times during the evening, but more annoyingly for customers they revealed that they suffered the same issue as Barnes and Noble in the USA, fantasy stock levels. With both companies this left them having to write e-mails to customers who thought they had confirmed orders telling them that they didn’t.

Comet never actually cut their online price, but were matching the Dixons Group price, their site didn’t crash, but ran exceedingly slowly, and again produced annoyed customers who had stock availability when they started, but discovered stock had run out when they reached the end of the buying process.

At the end of the evening speculation over an Argos price cut kicked off so there was a run on product reservations at Argos stores. This again showed a flaw in the Argos stock levels whereby the site would say stock was available at a particular store, but once the reservation was made you’d receive an automated e-mail saying that it wasn’t.

So what are all these problems with stock?

Let’s take a look at offline shopping. When you go into a supermarket to buy a packet of cornflakes, you physically pick up the box and put it in your trolley – effectively one item of the stock is allocated to you.

That isn’t what happens online. Instead the site checks the overall stock level when you pick an item. That stock level is not updated until later in the process, sometimes when you pay, other sites even later. If for example a retailer had ten Touchpad’s in stock, but one hundred people simultaneously accessed the site, all one hundred get told there is stock.

If like BestBuy UK your stock updates are instantaneous customers find products vanishing from their shopping carts during the process as the ten quickest get their details entered into the site. For the Barnes and Nobles you get one hundred customers who think they’ve bought a Touchpad, but you have to e-mail ninety of them cancelling the order.

So why do online retailers do it like this? The simple answer is it’s cheaper, and on a normal day it will rarely happen that there is a rush on a particular product – it’s just that when someone discounts a product by 70% and everyone wants one, the flaw gets shown up in spectacular fashion.

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