The Monday after Thanksgiving contained a hellish several hours for Yahoo and merchants on its order fulfillment platform…
What is one of the best ways for a web-based corporation to quell a user rebellion? Obviously – A transparent recounting of the issue and a mea culpa, of course.
One very non-economic reason for small businesses perhaps receiving less of the glory after Yahoo Shopping’s meltdown on Cyber Monday comes from Yahoo; it was only a matter of time before the web portal addressed the mob of angry merchants who missed out on sales.
Here’s a snippet of the apology from the company blog:
Yesterday afternoon, Yahoo representative Rich Riley found himself confessing a serious problem with the commercial hosting service it provided for some 40,000 small business customers on Monday — arguably the most important online shopping day of the year.
“The system outage occurred at one of the worst possible times,” Riley wrote on Yahoo’s corporate blog.
“On Monday at 6:00AM PT, the systems that power our merchant stores experienced outages, and shoppers of those stores were met with either error messages or they were unable to complete the checkout process,” he wrote, “and despite our concerted efforts to fix the problem as it emerged, we know that we let our merchant partners and their customers down.”
“The good news is that our systems are now operating normally, and our merchants are able to accept orders from their customers.”
“These issues lasted until about 1:00PM PT when, despite slow performance, transactions began going through at a much higher rate. By 6:00 PM PT things were back to normal and the performance of our systems was at 100%.”
We deeply regret the inconvenience this has caused to both our merchants and their shoppers. Our customers’ expectations were not met, nor were our own. And we are moving mountains inside Yahoo! to find out why and how this happened, and to take steps to try to ensure it does not happen again.
As for the future, rest assured that we are taking the necessary steps to prepare for the peak holiday selling season. We have technical and customer relations staff mobilized and ready to support our partners.
Cyber Monday may as well have been a day where Freddy Kruger, Michael Myers, and Jason Voorhees all stopped by Yahoo’s small business operations and killed various merchants in graphic and creative ways.
We will give Yahoo’s Rich Riley credit for stepping up today, with a “mea culpa” on Yahoo’s official blog about the problems. He offered apologies for the terrible, horrible, no good very bad day, but did not provide details as to what happened or why.
Some noted the rollout of a new cross-selling feature before Thanksgiving, and suggested it was responsible for the problems as traffic began to arrive at merchant sites. Another noted sites using an older checkout process had no downtime issues.
“Just telling us the time-line of what happened is not very useful,” said customer Wayne Eskridge.
But what Riley did not mention was one more very important piece of data: whether Yahoo’s responsibility for its outages, which its own graphic calls a “mea culpa,” will extend to the point of refunding its small business storefront customers for lost service. That could become a legal nightmare for the company, as online retailers haggle with Yahoo over what metric to use when determining appropriate compensation.
If hosting services were a public utility, there would be no problem: Service was out for roughly a day, and if a customer pays by the month, it would be compensated for 1/30 of its service. But as Internet Retailer reports this morning, OnlineStores.com, which operates multiple storefronts hosted by Yahoo Merchant Solutions, estimates it lost at least $35,000 in sales on Monday, as its sales volume plummeted to 20% of that of a normal day.
It is great that Yahoo stepped up to the plate on this, but it will be interesting to see if there is any lasting fallout. After all, it is not uncommon to experience hiccups when it comes to the web. However, having it happen to 40,000 e-commerce sites during one of the most successful online shopping days in history is not good.
“If you want to gain back the confidence of your customer base you ought to be more specific about what happened, why it happened, and what you are doing to assure us that it will not happen again,” Eskridge said.
Craig Clark, owner of bedding retailer Pacific Pillows, suggested that Yahoo should take steps to reimburse retailers for the downtime.
“This outage cost us big time in terms of money, time and customer goodwill,” he said. “I think a refund of all fees that Yahoo collected from each store damaged by this outage for the prior six months would be appropriate.”
Research firm comScore estimated that customers spent $733m online on Monday, the first time in a single day that online retail broke the $700m barrier.
Retail traffic is expected to get even heavier before the end of the year, possibly logging more than $800m in daily sales.
The Yahoo representative did not immediately respond to an e-mail asking whether the Yahoo customers would be compensated for their lost sales. Yahoo also has declined to say exactly how many of its 40,000 Merchant Solutions customers were affected.
As bad as this outage was, at least it did not happen later in December, when shoppers do a lot more buying. Cyber Monday, for all of its hype, is a marketing term created a couple of years ago. Merchants should see more business, barring any more outages, in the days closer to Christmas.