Bad service: Some major online toy sites had big trouble shipping products on time and addressing customer complaints. By the second week of December, offline giant Toys “R” Us threw up its hands and said it could no longer fill online orders by the holidays. eToys and Wal-Mart were able to hold out until a week before Christmas. Even customers who beat the deadlines encountered problems. At the beginning of November, Memphis mom Katie Dickinson logged onto eToys to order a game of laser tennis for her 11-year-old twin daughters. A month later, only the batteries had arrived. She had to wake up at 5 one morning to beat the busy signals on the customer-service line, and when she got someone, “they didn’t seem to know what they were talking about. I didn’t even feel like they were looking at a computer screen.” The game never came. (Says an eToys spokesman, “It was a very busy season. We had a significant surge in orders, and the fact is we handled most of them really well.”)
Meltdowns: Value America, a four-year-old outfit based in Charlottesville, Va., had a Web site where it sold everything from diapers to shampoo to color copiers. Early last year it poured money into TV and print ads to promote the site, leading up to a booming IPO in April. Then there was hardly a peep from the company. During the holidays, sales were sluggish, and last week Value America announced it was laying off half its 600-person work force and dumping all its product lines except office supplies, computers and consumer electronics. “We grew quickly across many categories, burned up a lot of cash and didn’t perform well,” concedes CEO Glenda Dorchak.
Order snafus: Petopia.com, based in San Francisco, is one of a half-dozen online sites offering pet supplies. The company clearly couldn’t handle the holiday traffic it advertised heavily to attract. Error messages on the Web site greeted our ordering attempts for two days, and by the time we got through, the holiday discount that attracted us had expired. When our order finally came, one item, a Tennis Tugger Figure 8 Dog Toy, was missing. After a 20-minute telephone hold, a weary agent admitted, “We weren’t exactly correctly prepared.” (To its credit, Petopia shipped us the missing item and honored the discount price on other items. A spokesperson says, “We’re taking care of our customers because we really can’t afford to lose them.”)
Overpromising: Instant-delivery services like Kozmo.com retain fleets of messengers to dispatch food, videos and gifts to customers, and boast delivery “in under an hour” to your doorstep. During the last days before Christmas, they were lucky to crack the three-hour mark. “I don’t think there was a company out there that was able to provide the level of service they were hoping to in the holiday season,” says Kozmo.com chief Joseph Park. Despite being overwhelmed by volume, Park says his business doubled over the previous month and pledges to continue building the company’s infrastructure.
There is a silver lining to these troubles: more than eight in 10 customers said they plan to shop online again next year, according to BizRate. That should give roughed-up e-tailers some consolation–and incentive to fix the glitches by next year.
