Toy retailer Hamleys had its website pillaged by bargain hungry e-shoppers over the weekend, as customers exploited an error with discount codes.
The offer allowed shoppers using different discount codes together to get a whopping 60% off goods at Hamleys' online store. After the 'offer' was displayed on the HotUKDeals website, thousands took advantage.
For Hamleys, the error has had the unwanted effect of clearing its warehouses of stock at the busiest time of the year. As the company uses a single, central warehouse, the shortages will also affect the company's stores.
But although the timing isn't great, Hamleys is certainly not the first retailer to feel voucher pain.
Thresher's also experienced a similar issue recently, after a coupon offering 40% off wine and champagne, and intended only for suppliers and friends, was distributed to over a million consumers.
Starbucks was also sued for $114m last year by a customer, after pulling a runaway promotion for free drinks.
According to The Guardian, more than half of Hamleys' top selling toy and doll ranges are now out of stock, while one very happy customer snapped up a £13,000 full-size snooker table for just £5,000.
The retailer - which recently revamped its web strategy - has now corrected the problem, though how much damage has been done remains to be seen.
Although e-vouchers are a big growth area, especially for tracking the effectiveness of offline and online ad campaigns, there are a few lessons for etailers here - not least, that the popularity of coupon aggregation sites means consumers are quick to pick up on mistakes in campaigns, and that discount offers can reach far beyond their intended audience.
The incidents also show the importance of monitoring traffic to spot any unplanned spikes in activity.
Oliver Felstead, European GM of Couponstar – which offers printable coupons for redemption offline – says the problem with online-to-online voucher campaigns are that they are so easy to set up. As a result, mistakes can often creep in.
Printable vouchers can be limited to one per person (although not in the Thresher’s case, because it sent its vouchers out as PDFs and didn’t implement distribution controls).
Felstead says: “Anyone can do online to online couponing and that’s part of the problem – there can be errors. Often the pricing has been set up incorrectly on the website because the content manager has set it up incorrectly or it’s been signed off when it shouldn’t have, or the wrong promo code has been allocated or been wrongly programmed. These things can then spread like wildfire online.”
Graham Charlton is Editor at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+.
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5:07AM on 28th December 2006
The experiment of Threshers was very interesting one...if it wasn't deliberate. www.ukonlinemarket.co.uk observed the phenomenon with keen interest, to see if the model can be rremodelled and adopted.
The most enlightening aspect was the speed with which users spread the news (and the coupon..) around. It proves the potential might of word-of-mouth and viral marketing strategies...though this sharp sword better be kept sheathed as it can be a deadly backfire as well. I hope marketers take it as a learning experience and more mature campaigns are launched in future, tackling the issue of online-to-online distribution of coupons.
9:33AM on 28th January 2009
Hi,
Thats a sad thing to hear about Hamleys. Vendors have to be very careful with such things. Many customers are just waiting to take advantage of even minor errors.
Thanks for sharing the info. It definitely serves as a warning for other vendors considering promotional activitives.
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