June 16, 2009 11:31 PM
- Text
Still Trust Your Web Site? Don't
(CBS)
This column was written by Evan Schuman, the editor of StorefrontBacktalk.com, a site that tracks retail technology, e-Commerce and security issues. Retail Realities will appear each Friday. Evan can be reached at e-mail and on Twitter.
There needs to be a specially unpleasant place in purgatory for technology that works well most of the time but turns utterly worthless when it's most needed. These fair-weather products might include cellphones that don't have coverage in remote areas, anti-lock brakes that surrender on black ice in a blizzard and emergency batteries that decide that the beginning of a power outage is a ideal time to die.
E-commerce aficionados have their fair-weather product: Web sites that try and say how many products are actually available in a particular store right now. The techniques work decently at some of the larger retail sites-and absolutely horribly at almost manufacturer sites-but when it's truly critical for a consumer to know an accurate answer, it often doesn't offer one. Consider this scenario: It's Dec. 23 and you decide that, for various political reasons, you really need to get the XKZ 124, which is an incredible popular, reasonably-priced and fictitious video game (note: the only reason that it's reasonably priced is because it's fictitious, but I digress, as I tend to do). It's the hottest toy this holiday seasons and the news media are reporting that stores everywhere are sold out.
It's too late to cheat and go the typical e-commerce route so your quest is to find some store somewhere that has one in stock and that will hopefully reserve one for you, as you speed to the store. There's also a nasty blizzard going on (and you already know your ABS doesn't like ice) so you'd really rather just drive to the one place that has it. Being 2009, you sit back and let some price comparison shopping site bots do the work and find you something in the region that has it. And it finds one. For paranoia reasons, you call the store and finally get someone on the phone. They deny having any of the shelf. What happened?
The discrepancy is known as the supply chain black hole. Even if everything goes perfectly within the store (an unlikely event at any time, but virtually unheard of in late December), the system will know exactly how many XKZ 124s it had in the storeroom and how many it put out on the shelf. It also knows how many have been purchased so if it subtracts the purchases from the number it put on the shelf, it should have an availability number, right? Not quite. A lot can go wrong.
Beyond the easy stuff-such as someone shoplifting products or copies of the game following behind some boxes in the backroom and never getting out to the shelf--there's a big space between that shelf and those point-of-sale terminals. What if it's in someone's cart as they are still working through the aisles in the store? Or in someone's cart (or arms) as they're waiting in line to pay?
There's also the lag time issue, a delay between when the purchase is made and when the database at the Web site gets that information and includes it in what it displays to consumers. Some retailers update once an hour, some once a day.
What's the bottom line for retail product availability data? If the product is not that popular and the store has a few copies lying around, the system will be accurate the vast majority of the time. But when the service is crucial because the product is ultra-hot, that's when the reliability of such product availability data becomes suspect.
That's the situation with retailers. Many manufacturers have their own e-commerce sites now and many try and say which of their retail distributors have the products. There are few colorful words that adequately describe how cosmically inaccurate those major brand manufacturer sites tend to be. Many of them are scared of stealing sales from their distributors so they avoid selling directly (or do it such a high price that sales are few) and send sales prospects directly to their retailers. But because their data is at least one step removed, it's often not even close, showing retailers who might not even sell that product anymore.
What makes this problem so painful is the sharp increase in the number of consumers purchasing merchandise through some retailers' buy-online-pickup-in store program. A few years ago, Best Buy came up with a costly but brilliantly simple method to all-but-guarantee precise availability data. They let the systems do their job but once the customer placed the order, the customer would be told to not make the purchase until the store e-mailed back. At that moment, a store associate would get an alert, run out to the shelf, grab one of the products and get it to customer service. Only then would the customer be told they were clear to pick it up.
Best Buy has since halted the practice, referencing the labor costs.
The ability to have precisely-accurate inventory data is unlikely to happen for several years, when some form of item-level RFID kicks in. RFID tags are tiny wireless devices that are attached today to some higher-priced items and they communicate to the store their exact location. This would theoretically allow a store to know about that product that was shoplifted, hiding behind the crate or is right now waiting in line to be purchased. Until then, the best option for a consumer is to simply call the store and verify availability before driving. That should be accurate, unless of course the 17-year-old temporary employee doesn't know what he/she is talking about. Then you're on your own.
Although not helping with product availability accuracy issues, one interesting site out there is trying to consolidate all of the Web product availability data to help consumers search for products based on who is claiming to have one in stock. Sometimes, when birthdays, anniversaries and other special occasions sneak up on us, finding a store that has it in stock might be more useful than sorting by price or other features. The site, Krillion.com, literally steals (with permission) the data from various retailers. It won't make the supply chain black hole disappear in late December, but it might make finding availability a little easier in the meantime.
By Evan Schuman
Special to CBSNews.com
There needs to be a specially unpleasant place in purgatory for technology that works well most of the time but turns utterly worthless when it's most needed. These fair-weather products might include cellphones that don't have coverage in remote areas, anti-lock brakes that surrender on black ice in a blizzard and emergency batteries that decide that the beginning of a power outage is a ideal time to die.
E-commerce aficionados have their fair-weather product: Web sites that try and say how many products are actually available in a particular store right now. The techniques work decently at some of the larger retail sites-and absolutely horribly at almost manufacturer sites-but when it's truly critical for a consumer to know an accurate answer, it often doesn't offer one. Consider this scenario: It's Dec. 23 and you decide that, for various political reasons, you really need to get the XKZ 124, which is an incredible popular, reasonably-priced and fictitious video game (note: the only reason that it's reasonably priced is because it's fictitious, but I digress, as I tend to do). It's the hottest toy this holiday seasons and the news media are reporting that stores everywhere are sold out.
It's too late to cheat and go the typical e-commerce route so your quest is to find some store somewhere that has one in stock and that will hopefully reserve one for you, as you speed to the store. There's also a nasty blizzard going on (and you already know your ABS doesn't like ice) so you'd really rather just drive to the one place that has it. Being 2009, you sit back and let some price comparison shopping site bots do the work and find you something in the region that has it. And it finds one. For paranoia reasons, you call the store and finally get someone on the phone. They deny having any of the shelf. What happened?
The discrepancy is known as the supply chain black hole. Even if everything goes perfectly within the store (an unlikely event at any time, but virtually unheard of in late December), the system will know exactly how many XKZ 124s it had in the storeroom and how many it put out on the shelf. It also knows how many have been purchased so if it subtracts the purchases from the number it put on the shelf, it should have an availability number, right? Not quite. A lot can go wrong.
Beyond the easy stuff-such as someone shoplifting products or copies of the game following behind some boxes in the backroom and never getting out to the shelf--there's a big space between that shelf and those point-of-sale terminals. What if it's in someone's cart as they are still working through the aisles in the store? Or in someone's cart (or arms) as they're waiting in line to pay?
There's also the lag time issue, a delay between when the purchase is made and when the database at the Web site gets that information and includes it in what it displays to consumers. Some retailers update once an hour, some once a day.
What's the bottom line for retail product availability data? If the product is not that popular and the store has a few copies lying around, the system will be accurate the vast majority of the time. But when the service is crucial because the product is ultra-hot, that's when the reliability of such product availability data becomes suspect.
That's the situation with retailers. Many manufacturers have their own e-commerce sites now and many try and say which of their retail distributors have the products. There are few colorful words that adequately describe how cosmically inaccurate those major brand manufacturer sites tend to be. Many of them are scared of stealing sales from their distributors so they avoid selling directly (or do it such a high price that sales are few) and send sales prospects directly to their retailers. But because their data is at least one step removed, it's often not even close, showing retailers who might not even sell that product anymore.
What makes this problem so painful is the sharp increase in the number of consumers purchasing merchandise through some retailers' buy-online-pickup-in store program. A few years ago, Best Buy came up with a costly but brilliantly simple method to all-but-guarantee precise availability data. They let the systems do their job but once the customer placed the order, the customer would be told to not make the purchase until the store e-mailed back. At that moment, a store associate would get an alert, run out to the shelf, grab one of the products and get it to customer service. Only then would the customer be told they were clear to pick it up.
Best Buy has since halted the practice, referencing the labor costs.
The ability to have precisely-accurate inventory data is unlikely to happen for several years, when some form of item-level RFID kicks in. RFID tags are tiny wireless devices that are attached today to some higher-priced items and they communicate to the store their exact location. This would theoretically allow a store to know about that product that was shoplifted, hiding behind the crate or is right now waiting in line to be purchased. Until then, the best option for a consumer is to simply call the store and verify availability before driving. That should be accurate, unless of course the 17-year-old temporary employee doesn't know what he/she is talking about. Then you're on your own.
Although not helping with product availability accuracy issues, one interesting site out there is trying to consolidate all of the Web product availability data to help consumers search for products based on who is claiming to have one in stock. Sometimes, when birthdays, anniversaries and other special occasions sneak up on us, finding a store that has it in stock might be more useful than sorting by price or other features. The site, Krillion.com, literally steals (with permission) the data from various retailers. It won't make the supply chain black hole disappear in late December, but it might make finding availability a little easier in the meantime.
By Evan Schuman
Special to CBSNews.com
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