Jane Lindhe Reporter

Jane is a retail and small business writer with a special interest in emerging companies and entrepreneurs. She covered the financial services industry before moving into general business journalism and has written for The Age and The Australian Financial Review.

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#Clickfail’s silver lining

Published 22 November 2012 10:03, Updated 12 December 2012 10:23

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The disastrous online sale that promised to “stop the nation” with discounts of between 60 and 90 per cent left would-be shoppers and participating retailers fuming. However, its failure has presented some opportunities, industry players say.

Social media was used as a megaphone by angry shoppers, with the Twitter hashtag #clickfrenzy replaced by #clickfail as they attempted to sign onto the lacklustre sale website for hours. Meanwhile, websites of large retailers such as Myer, Dick Smith and Harvey Norman fell over amid the bottleneck.

Department store David Jones encountered its own PR nightmare when, in an attempt to stage its guerilla sales event to rival Click Frenzy, it overloaded its system, rendering its site inaccessible for hours.

Several technical experts have since criticised Click Frenzy organisers and some participating retailers, saying their software and technology platforms were widely known to be incapable of handling the demand. Others have said it was a blatant ploy to gain the details of more than 1 million would-be shoppers and collect more than $1 million advertising revenue.

Click Frenzy organisers attempted to put a positive spin on the failure, saying on its site it was “virtual crowd control in action” and “we’re pushing all kinds of boundaries”.

“We geared up to sustain up to a million visitors through a 24-hour period. When you exceed that in minutes, the build-up yesterday was tsunami-like in terms of the constant building of registrations we were receiving,” Click Frenzy director Grant Arnott said.

Amid the chaos, some retailers say the sale did indirectly and directly increase online sales, thanks to the power of marketing.

Myer said it was happy with the result of Click Frenzy, saying it experienced “significantly higher than usual online sales”. Other retailers such as CatchoftheDay, Woolworths and Windsor Smith said the website’s failure encouraged would-be shoppers to look elsewhere for bargains.

Catchoftheday co-founder Gabby Leibovich says Click Frenzy’s crash taught retail some “powerful lessons”. He says his company – the largest group buying deals website in the country – has crashed “tens of times” since starting seven years ago. It has taken that long to build technical capabilities and understand what customers want, he says. Catchoftheday processes about 20 orders a second, which without the right infrastructure would be impossible, he says.

“Firstly I think Power Retail [the company behind Click Frenzy] should be congratulated on the power of its marketing, which was amazing. The whole country was watching and it [the campaign] put online retail on a pedestal,” Leibovich says.

“For us, it was a very positive thing. We’ve had the best day, with 1.5 million unique visitors. We’ve also had a huge week, with $8 million is sales this week.”

Click Frenzy says it has received “positive responses’’ from retailers such as Booktopia and Chemist Warehouse.

“Phenomenal sales for Booktopia so far. Site never missed a beat. In the past hour we were doing 11 sales a minute with customers doing large orders,’’ Tony Nash of Booktopia reportedly told Click Frenzy.

Julia Salter of EzyDVD said its site saw “a 550 per cent increase in sales and already trends suggest we’ll do the same sales number in the next 12 hours’’.

“Seventy-five per cent of all visitors are new to the site, which bodes well for future sales especially around the key holiday period. We couldn’t be happier.’’

But still, managing the risks of promoting such a high-profile event and the expectations of customers and clients is important, says PricewaterhouseCoopers digital specialist Simon Doukas. He says shoppers love genuine sales and are becoming increasingly aware of fakes.

“If not actively managed, social media can be your worst enemy, especially during a crisis,” he says. “In the digital world execution is everything – there is no such thing as a quick fix.”

The lessons for retailers:

1. Australians consumers love a “genuine” sale

One key success point for Click Frenzy is the huge amount of market awareness and activity it was able to generate in a relatively short time. With hundreds of retailers and brands signed up to the event, Click Frenzy was able to leverage the brand rub and sign up thousands of customers to the site, which further supports the wide belief Australian consumers love a sale and will search far and wide for a good bargain.

Although no specific metrics have been released, the large volume of traffic that resulted in the site crashing was a promising sign of potential future success for these one-off sales events in Australia.

2. Respect the “informed” consumer

The days of local retailers dictating product ranges, pricing and promotion are gone. With the rise of globalisation and the adoption of online shopping, consumers are far better educated and resourceful in finding great products at great prices.

Following the launch of Click Frenzy, consumers immediately began comparing the “deals” to local and international offers, highlighting the lack of value from some of the Click Frenzy offers via Facebook.

One example (seen below) is Jamie Oliver’s 15-minute meals book, on sale for $26.95 via the Click Frenzy site. Customers were quick to point out the book is available for less elsewhere (~$15 from Britain and under $25 at BigW and K-mart at a non-sale price).

3. If not actively managed, social media can be your worst enemy

Click Frenzy has been extremely successful in utilising social media to generate consumer awareness by tapping into the reach and voice of the social community through Google+, Facebook and Twitter. However, many Australian consumers have since turned and are using social media to attack the brand. The most prominent activity is through the Twitter handle and hashtags ‘#clickfrenzyfail’ and ‘#clickfail’, as well as via a specially set-up Click Frenzy Fail Facebook page, which has amassed more than 3600 fans in its 19-hour history.

One disgruntled customer took matters one step further and posted a video on YouTube that targets the poor execution and product offers, which received more than 7500 views in under 12 hours.

4. In the digital world execution is everything

There is no doubt the Click Frenzy campaign has done a lot of great things over the past few weeks. Ultimately the inability to execute on the promise of a “user-friendly online marketplace built to withstand enormous concurrent traffic volumes” was undoubtedly its biggest undoing.

Testing, as arduous as it is, must scale at least in lock step with any claims made to customers. As the claims get more ambitious, so, too, must testing become more focused and detailed, to ensure expectations are met.

In this instance, the apparent surprise of Click Frenzy’s management on the impact of the “tsunami of customers” on its infrastructure indicates a less-than-thorough testing program, eerily paralleling the well documented example of the Republican Party’s “Orca” campaign, widely regarded as a failure by the wider technology community.

Execution is everything online and unfortunately for Click Frenzy, as with many retailers, the last mile is where they have failed and copped the most criticism, potentially beyond repair.

5. There is no such thing as a quick fix

The final key learning from this campaign is that there is no such thing as a quick fix when it comes to online retailing. A flashy sales event may drive traffic and awareness, but it is not sustainable and does provide true value to the consumer on its own. For retailers to compete on a global scale, a transformational approach is required to deliver a competitive pricing and product offer through improved supply chain, operational structures and a razor-sharp focus on bringing value to the customer.

SOURCE: PWC

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