Target Corp. (TGT) spent two years preparing to take control of its website from Amazon.com Inc. (AMZN) and on the day of the debut included a link on the home page titled “learn all about what’s new.” The link didn’t work.
The error, fixed later that day, proved to be a sign of problems to come. The new Target.com has crashed six times since it went live on Aug. 23, and accounted for more than half of the major outages this year at the top 100 sites in the U.S. by revenue, according to Web monitor AlertBot. The site’s president left the company. Black Friday, the biggest shopping day of the year, is also less than three weeks away.
“They could lose customers for this,” Robin Lewis, chief executive officer of the Robin Report retail newsletter, said in an interview. “Target is so on top of everything else they do over there, and how they run their business. For this to be happening is surprising.”
Like many brick-and-mortar retailers, Target has been grappling for years with how to improve its Web operations as shoppers migrate online. In the early days of the Web, companies such as Target and Toys “R” Us Inc. found it easier and less expensive to outsource their online operations to Amazon.
Target, the second-largest U.S. discount chain, partnered with Amazon in 2001 and paid commissions into this year -- more than $100 million a year, according to Colin Sebastian, a San Francisco-based e-commerce analyst for Robert W. Baird & Co.
The chain, based in Minneapolis, decided to bring Target.com in-house to improve the experience, eliminate the commissions to Amazon and integrate it with Target’s more than 1,700 stores.
Outside Comfort Zone
That meant it had to go outside its comfort zone by hiring developers and working with several partners to build a new site from scratch that generated more than $1 billion in annual sales.
Target’s problems aren’t unique and point to larger obstacles within the industry to improving e-commerce, according to Sucharita Mulpuru, an Internet analyst at Cambridge, Massachusetts-based Forrester Research Inc. Retailers need to have their own Web operations to compete with Amazon, and attracting top technology workers and executives can be difficult, she said.
“It’s really hard even in Silicon Valley to find IT engineers,” Mulpuru said. “Retailers aren’t getting the engineers from Facebook. This isn’t a-list development talent.”
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