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On Tuesday I received a message from a friend pointing me to an item within Tesco Direct’s website. I clicked the link and was welcomed with a 64GB iPad 3 costing only £49.99.

The person who messaged me had just completed his order and showed me the confirmation email. With that, I set off to buy two (why not?).

Within three minutes the website was down (I was on the delivery stage of the order). 20 minutes after that the site was back up and I could not proceed. I was so annoyed! I could have bought two iPads for £99.98!

An hour later the BBC had already published the story.

Please note: this is purely conspiracy theory, I am not actually accusing Tesco but merely observing a possibility...

The Terms that matter

There was one extract that caught my attention, the BBC's observation of the website terms and conditions:

If, by mistake, we have under priced an item, we will not be liable to supply that item to you at the stated price, provided that we notify you before we despatch the item to you. In those circumstances, we will notify the correct price to you so you can decide whether or not you wish to order the item at that price.

Tesco noted this mishap as an “IT error”. However, with this note coupled with the term above make Tesco completely protected. That’s why it’s ok if it doesn’t honour any purchases.

The result of the "error"

Here’s what happened: the item was published and people started to notice. It was observed online through the wonderful media that is social networking. The BBC article was published within the hour and wasn’t until after that that the error was corrected. This was enough to grab media attention.

However, I want to make one observation which was something I did at the time.

I visited Tesco Direct’s website. I added the iPad3 to my basket. When I realised I couldn’t complete the purchase I decided to have a browse in the shop for other items. I wonder how many other people did that.

I wonder how much traffic was gained from this error, what their change in conversion was, how many more completed transactions there were, and so on.

Taking this theory further – the next day...

Just as we all woke up in the UK people were still talking about the iPad but hold on, another story has just emerged. Tesco is now increasing the retirement age to 67 (reports the BBC and Guardian). This story was originally published on various news sites websites the same day.

However, this story grew larger than the iPad story as social media clocked onto it. By 11am on March 14 the retirement age story had overtaken the iPad story. Odd.

Again?!

So, now Tesco seems to have more media attention on this retirement age story. I guess it should, it affects more people and is more newsworthy.

People were still talking about the iPad though. Well, there’s only one way this could be shoved further away. It’s March 15, two days after the iPad error and Tesco UK’s CEO decides to resign. This story now dominates the other two previous stories.

Far fetched? Of course. Or is it?

Fine. This is a wild accusation to implicate that the iPad error was made intentionally with the knowledge that two days later it would be on the backburner. I’m sure it was a mistake.

However, think about this from an online perspective:

  1. When it comes to adding new items, especially something as high profile as a new iPad on an extremely popular online store, ensure the item is checked and double checked before it’s published.
  2. When published why leave it over an hour, coincidentally just as the story breaks on BBC News, to realise that an error has occurred.
  3. Were there any other items affected by the same IT error or was it solely added to one of the most sought after products of the year?

Another thing to note is a search result for “ipad 3”, which I don’t need to look into Google Insights to know it’s a popular search term at the moment:

The Mirror’s story about the error is at position four, just above the fold for me. The title lets me assume that “shoppers won’t be getting them” but still, the META description seems good from a CTR point of view.

Negative brand exposure? Nah

I’m sure that, if this was a well laid out plan, that there is an extreme risk of negative brand exposure. Let me ask you this – are you going to stop shopping at Tesco because it incorrectly priced one item online? Probably not.

It should be noted that, after a similar online pricing error, M&S actually honoured the orders placed by customers. It had wrongly priced 3D TVs at £199 instead of £1,099. M&S offered vouchers initially before bowing to an online petition from customers. 

Tesco's visits seemed to have shot up in the past week. Of course we have to assume that a lot of people will be pre-ordering the iPad at the correct price, but this jump?

One thing I would love to know is how much profit or loss was made as a result of this error. The iPads at that price will not be honoured so no money is lost there. What do you think?

Was this a convenient error or a fantastic strategy from an online genius?

Alex Moss

Published 16 March, 2012 by Alex Moss

Alex Moss is Director at Firecask and a contributor to Econsultancy. Find him on TwitterGoogle+ and Linkedin

6 more posts from this author

Comments (12)

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buyerbeware

To add afew thoughts to an exceelent piece.

Tesco has an aggressive strategy on the iPad. It started selling at 00.01, before Apple stores opened.

On the pricing error - 3 days before the launch? The price it gets wrong from tens of thousands of prices is on the new iPad?

It has a trackrecord too of pricing errors so knows if the impact on sales means it should do something about it or not.

On Twitter, Tesco said it was a leaked page which sounds different to an IT glitch.

Is it even investigating said leak?

https://twitter.com/#!/uktescooffers/status/179640557168115712

over 4 years ago

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Dug

Admittedly, you concede that this is pure speculation and conspiracy theory, but I have come to expect better of econsultancy.

I am a Tesco employee and I could say a lot on this matter, but I am not a spokesman for the brand and it isn't my place to do so.

As a result, I won't comment beyond pointing out some basic flaws in this argument that anyone should be able to see.

1. Expand that searchmetrics graph to the look at five, or even eight, weeks and it shows a very different picture - cutting the data to make it show what you need in order to support your argument is simply misleading.

2. A searchmetrics visibility graph does not equal visits. The overall search visibility of the whole tesco.com domain against the millions of keywords tracked by searchmetrics will bear no relation to the traffic gained from the iPad pricing problem - presenting this graph as "visits" is incredibly misleading.

3. You ask how much traffic the mistake would have bought Tesco, yet you completely ignore the traffic and revenue lost from the site-outage. As with the convenient cutting of the graph, this is demonstrating a somewhat less than impartial look at this issue.

4. TVs are not iPads. You almost certainly know about Apple's policy on the pricing of their products and how they don't allow retailers to offer discounts. What do you think Apple's response would be if Tesco honoured those orders?

5. The announcement of the resignation of a CEO of a major PLC is something that is going to be well planned and coordinated. It isn't just a case of sending out a press release; there is going to be a coordinated series of communications that include staff, shareholders, Companies House, the city, the press and more. This will have been planned for weeks and the date was probably decided long before Apple announced their launch date.

Similar can be said for changes to the pension scheme. It isn't just a press release, there is a lot of coordination that would have happened there and the date would have likely been planned long in advance.

8. You also ask whether people would "stop shopping at Tesco because it incorrectly priced one item online". Shopping at a supermarket for your weekly groceries is one thing, but shopping on Tesco Direct is a completely different kettle of fish. As you well know, there is little brand loyalty in this space and, with Apple's pricing policy, there is going to be no way to distinguish on price. My guess is that, if anything, this would actually hurt Tesco's New iPad sales and potentially damage the brand perception of Tesco Direct.

Saying that, as with all Apple releases, everyone is going to sell out on the first day anyway because demand will be so high. You don't need extra publicity for an iPad launch - Apple-hungry customers will stampede to the door of anyone who has stock left.

To my mind, this article is little better than the sort of sensationalist link-bait that the Daily Mail publishes. Come-on econsultancy, you can do better than this.

over 4 years ago

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richard roebuck

Pricing glitch - mm not so sure. How many people have now signed up to Tesco Direct?? I'll admit i went for this offer not really expecting it to be honoured, but have already had newsletter through by email with their latest offers.
I know the consumer law gives Tesco the right to refuse to honour the orders but maybe its time the law was changed

over 4 years ago

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Jennifer Nolan

I am just in the process of complaining to Tesco re their pricing in store of another item faux par.
I bought two items which stated "Any Two" for £5.
It seems that Tesco dont understand the word "ANY" as I was charged seperately for each item.
Whether this is a ruse to get customers to spend more I dont know, but when I complained I was told it was "Two of the Same item".
Well "any" other store stipulates that by saying "2 for £5".
I had to waste time going to customer services to have my bill checked, go back to the shelves to double check and speak to a very smart manager person who admitted Tesco had got it wrong!

over 4 years ago

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Liang

Intentional or not? I'd say depends on their willingness to honour the orders. The potential brand damage is too great to ignore.

I wouldn't stop shopping at Tesco just because they made an error, who doesn't make mistakes? I however will stay away from merchants who don't honour the deal, especially after the order is completed(as far as I am concerned, once the conformation email is received, the order is completed). Common sense, right? So I say either their marketing team is too stupid or arrogant, or it was a genuine mistake.

over 4 years ago

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Robin Gillyon, New Media Consultant at massio limited

Seriously silly article - never attribute to malice...

over 4 years ago

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Matt

What I fail to see is the connection between the events - 3 major outbreaks, major themes encountered (ecomm mistake, followed by unpopular HR policies, followed by CEO's resignation).

The concatenation is more worth analysing rather than the CTR.

over 4 years ago

Peter Leatherland

Peter Leatherland, Online Sales Manager at Ethical Superstore

I don’t think it was deliberate although it’s an interesting idea. Even though their terms and conditions say they don’t have to honour sales if there has been an error, this would be against the law if it was deliberate. They would be intentionally advertising the wrong price which is false advertising, I don’t think they would risk doing this to reap the benefits, along with negative consequences you list.

I think it is more of a looking at the positives from a bad situation and I don’t think they have suffered at all, yes as Dug says iPads will sell out at launch but there will be an ongoing benefit, I wonder what percentage of people would have immediately thought ‘Tesco Direct’ when they wanted to buy an iPad, and what percentage do think of Tesco direct now.

over 4 years ago

Ashley Friedlein

Ashley Friedlein, Founder, Econsultancy & President, Centaur Marketing at Econsultancy, Centaur MarketingStaff

My base assumption is that it wasn't deliberate, however the article raises interesting and important points around the opportunity for pricing strategies online and quickly capitalising / piggy-backing on the back of significant 'real world' events like the the launch of a major new product.

over 4 years ago

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Earl

wow reading this really does turn the tide!

over 4 years ago

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Mike Gathergood

Tesco Extra stores are currently dsiplaying a package deal comprising a Technika 42" 3D LCD TV with Bluray Player, with a headline price of £399
Having seen this deal in Tesco Extra's Bracknell store, I was told that TVs over 37" are for home delivery only, and that I should go home and use the product code 901-9277 on the Tesco website.
Unfortunately that code is priced at £449 online.
I phoned Tesco Direct's helpline. After a rather "circular logic" discussion with one gentleman, my call was forwarded to his supervisor who gave his name as Lewis Tamplin. He explained that the package priced at £399 was out of stock anyway, but that I could order the package at £449 ss they had stock of the package at the higher price.
Can anybody help me to understand this? Surely the "bill of materials" for 901-9277 is the same regardless of whether it's priced at Tesco Extra's £399 or Tesco Direct's £449? And, that being the case, it's either in stock or it isn't, regardless of whether the customer buys it from Tesco Extra or Tesco Direct.
The upshot is that Tesco Extra are advertising an item at £399, knowing that they cannot supply it, and suggesting customers buy it from Tesco Direct for an additional £50

about 4 years ago

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