The E-Commerce Crash That Never Should Have Happened.
Posted on 09/29/2020 at 10:00 AM
What Went Wrong with the PlayStation 5 and Xbox Pre-Orders?
According to Google, e-commerce has been a booming source of income for retailers over the past 6 months. Between COVID-19 concerns, need for convenience, and flexibility, and shifting consumer demand, smart retailers have invested heavily in e-commerce. So why did major retailers like GameStop, Amazon, and BestBuy drop the ball so hard this month?
A very big deal...
For those unaware, because they typically don’t follow the video game industry, the release of a new console is a very big deal. This once in a decade event represents the next generation of gaming is a huge opportunity for the retail industry thanks to online shopping. Retailers have an opportunity to make a massive profit with the sale of multiple add-on products that typically go with the consoles when the sense of buying urgency is at its highest. Think “Black Friday” or the newest Apple products, but with pre-orders, demand goes for several months leading up to the launch of the product.
This month marked major announcements and activity in the video game industry. After announcing their November release dates, both the PlayStation 5 and the next generation of Xbox consoles went live for preorder. This is something that electronics retailers knew was coming and should have been prepared for. They weren’t. Here’s what happened, why, and what to expect next.
On September 16, 2020, Sony hosted it’s much anticipated PS5 showcase event. At the conclusion of the event, the company announced the console’s release date (November 12, 2020), price points, and that preorders would be available the next day.
Unfortunately, retailers had other plans.
Make you wait to get the new #PlayStation5? Nah, that’s not like us. Go on, preorder it NOW!— Walmart (@Walmart) September 16, 2020
No one really knows which retailer decided it would be best to start accepting preorders early, but one thing is certain, Target, BestBuy, Amazon, Walmart, GameStop, and others all opened the floodgates for preorders a full day before Sony promised they would. Customers were furious as preorders went live later in the evening far before many were aware or ready. Even Sony, who had promised to send a link for exclusive preorders, did not get these emails sent out until after many retailers had run out of stock.
The decision to open preorders early likely stemmed from retailers trying to be as competitive as possible. However, the sudden and unexpected flood of millions of customers constantly refreshing their browsers led to the e-commerce CMS systems crashing and blocking customers as a way of trying to protect from hacking attempts.
A week later, many of these customers still reported issues with getting logged on to the websites. Sony, to their credit, took much of the blame when they released a statement via Twitter apologizing for how preorders were handled and promising more waves of the system would become available soon.
Other customers took to social media complaining that they had the preorder in their virtual cart only to have it vanish before they could finish checking out. At the time of this writing, none of the retailers who had customers experience this issue offered any kind of public explanation for this.
Another issue that potentially caused websites to crash and preorders to vanish was the introduction of “Spambots”. These computer programs represent a real threat to any website as they have the ability to refresh a screen every second (or less in some cases), add an item to a cart the moment it becomes available, and click “Checkout” before the average customer can get the website to load once, let alone reload. Why would people use these kinds of programs, you may ask? To resell the preorders for much more than the original cost. Customers reported seeing a single console preorder guarantee (not the console itself, just a promise of a secured preorder) on eBay listing for $1,500 or more.
Behind the Scenes of a Breakdown
The way that most e-commerce platforms work on the back-end is that items can be labeled as “Instock” but with a “future ship date” with a specific quantity listed. When this quantity is spoken for, the item becomes “Listed” but shows as “Not Available for Sale” or can be completely unlisted.
A key component of the e-commerce experience is the shopping cart. Typically, when an item is added to a cart, it is no longer listed in the quantity that is “Instock” so that it may be purchased. There’s usually a time limit, say 5 minutes, before the item is removed from the cart so it is available for others. This (theoretically) gives customers enough time to log in and add their payment and shipping info and finish purchasing the product. When the aforementioned time limit is not set, however, customers are not given the time they might need to finish logging in. This means that unless you were already logged in to the retailer of your choice, with your payment information already entered, at the precise moment consoles became available, you probably were not going to get one.
What about in-person preorders?
Many store team members were not informed of how many units they would have available for pre-order in-store or were misinformed. Customer’s names had been added to preorder call lists and were promised that they would be notified the moment preorders became available. Thanks to the online fiasco, there was not enough time to deliver on this promise. One store even reported that corporate offices removed some of the units from the store’s systems to open their availability for online sales. This meant that live, in-person staff, was left looking angry customers in the eye with little to no explanation.
When the second wave of preorders was promised with a (real) 24-hour notice, store managers called many of their most loyal customers or those who had been in line the first time so that they would have a chance at securing a preorder in store. This had mixed results. Some retailers promised to have both online and instore preorders but chose to only offer the preorders in-person to help save face. This left online shoppers feeling left out as some spent hours refreshing their browsers for a preorder option that was never destined to happen.
Why did retailer websites crash?
The website crashes were likely due to servers being unable or unprepared to handle the massive load of extra traffic caused by both excited humans and vicious spambots. When done right, like in the case of Black Friday and Cyber Monday sales, websites are prepared to handle the flood of extra traffic thanks to Managed High Availability Hosting. This means that a team of dedicated IT professionals is on the job in real-time ensuring little to no downtime is experienced by the end-user. Even if the major retailers had this kind of IT team on the ready, they likely would have been ready the next day, not at a moment’s notice.
Where was the overall failure?
When a major event that is sure to impact an overall digital and customer strategy is on the horizon, a company needs three phases:
Foresight: seeing that an opportunity is coming and being aware of every eventuality that could happen, even if it most likely won’t.
Planning: “Failure to plan is a plan to fail”. Once we know what could happen, we need to know how we’ll handle it.
Execution: rolling out the plan and being adaptable and flexible enough to change the plan as needed (as long as you can support it).
Clearly, foresight and planning are both critical. Retailers knew that these systems were coming “Holiday” of this year all the way back around holiday time last year. There was plenty of time to finetune the e-commerce experience and be prepared for every possible eventuality. Unfortunately, it appears no one did.
All three phases are tied together by the most critical element: communication, both internally and externally. Clear communication is the key to setting expectations and delivering results! Broken communication leads to broken processes and, in the case of customer experiences, broken trust.
Who’s to blame?
As mentioned before, open communication is key. Sony should have been more clear with retailers about unit allocation and when more units would be released, retailers should have more clearly explained availability to both their internal staff and customers, and all should have set clear expectations for the next steps. With a clear and precise rollout strategy, any well-prepared retailer could have come out above the rest.
Was Xbox Series X and Xbox Series S better?
Short answer: Not really. With a later release date of November 22, 2020, many retailers assumed that Microsoft would learn from Sony’s mishandling of preorders. Unfortunately, communication was not much better and retailers reported being sold out within 20 minutes with no information on when the preorders would be restocked.
This all could have been avoided.
Many retailers utilize e-commerce platforms from third parties or that use open-source coding. Custom e-commerce platforms, like SiteViz Commerce, allow for scaling and flexibility. When partnered with the right web developer with an IT team on-site, retailers can set themselves up for success. At Global Reach, we have over 2 decades of experience building custom e-commerce platforms and our teams of data analysts often can foresee issues before they arise with enough time to address them. This is the power of a custom platform and a trusted partner. This is the power of SiteViz and Global Reach.
If you’re ready to improve your overall e-commerce strategy, why not set up a free consultation with a company that can meet your needs? We’re here for you!