Executive Briefings

Pricing Errors Continue to Haunt E-Tailers, as Target Learned Recently

Pricing mistakes are still the bane of e-commerce, and now Target seems to have come up with a much more efficient way of creating them. On Jan. 16, Target began offering a Sony PlayStation 3 (list price: $350 to $500) for $39.99 on both Target.com and the retailer's Amazon store. What's interesting, though, is how the foul-up appears to have happened. It looks like there really was a new product Target intended to sell. But instead of creating a new page for that product, a Web site designer decided to modify an existing page-and before that new page was completed, it somehow hit the sites.

Target and Amazon both have policies published on their Web sites that let them cancel orders because of pricing errors, and the next day customers received E-mails with the bad news.

This incident is reminiscent - although not as spectacular as - what happened with a pricing-engine error last year at Zappos, which resulted in the e-tailer honoring mistakenly low prices and losing $1.6m.

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Pricing mistakes are still the bane of e-commerce, and now Target seems to have come up with a much more efficient way of creating them. On Jan. 16, Target began offering a Sony PlayStation 3 (list price: $350 to $500) for $39.99 on both Target.com and the retailer's Amazon store. What's interesting, though, is how the foul-up appears to have happened. It looks like there really was a new product Target intended to sell. But instead of creating a new page for that product, a Web site designer decided to modify an existing page-and before that new page was completed, it somehow hit the sites.

Target and Amazon both have policies published on their Web sites that let them cancel orders because of pricing errors, and the next day customers received E-mails with the bad news.

This incident is reminiscent - although not as spectacular as - what happened with a pricing-engine error last year at Zappos, which resulted in the e-tailer honoring mistakenly low prices and losing $1.6m.

Read Full Article