February 01, 2007

Customer Service: Do You Pull An Item Off The Website If It Is Sold Out?

The esteemed Becky Carroll at Customers Rock! describes an experience she had at Coldwater Creek.

An element of her discussion is interesting to me. What you do with online items that are sold out? In Becky's case, she clicked on sale items, only to be told that the item was not available. Other items were placed in her shopping cart, only to later disappear, because they were also sold out.

Becky describes a common problem in multichannel retailing. What she experienced, as a customer, is not optimal.

Now let's put yourself in the place of an employee at Coldwater Creek. You purchase 10,000 units of this dress. You publish the item in a catalog, you pay Google additional money for the keyword "Dresses", and oh oh, sales go crazy. Within a week, you sell out of most of the skus.

If you pull the item down from the website, you won't know how many units you 'could' have sold. Keeping the item online allows you to count the fact that you might have sold 19,000 units. Next year, you have a much better idea about how many items you need to purchase. For this reason, many employees at multichannel retailers want to keep recording the 'demand' for these items.

So --- my question for you, the loyal reader, is this: Do you disappoint 9,000 customers like Becky by leaving items online when they are sold out, or do you give Becky a better shopping experience today, but fail to purchase enough items for next year (or purchase too many), disappointing next year's customers and hurting next year's profit and loss statement? If your job security is based on correctly forecasting the right number of units, you'll want to keep those items online, so you can correct your error from this year.

I don't think there is a right or wrong answer. I do want to hear your thoughts, because it is a dilly of a pickle.

By the way, if you want a thankless job, go work for a multichannel retailer as an inventory manager. It's not a lot of fun to be wrong every single time you forecast sales.