Why Amazon Beats Wal-Mart: A Tale from Black Friday

Innovation, the Internet, gadgets, and more.
Nov. 28 2012 6:27 PM

Why Amazon Beats Wal-Mart

A tale from Black Friday.

(Continued from Page 1)

“We don’t have any.”

Not surprisingly, I didn’t trust Mr. Blue Vest. So, back in my car, I logged back in to Walmart’s site and ordered the Xbox, electing for same-day, in-store pickup. The purchase instantly went through; within four hours, the site promised, I’d get a message telling me to pick up my order. I was ecstatic.

But an hour and a half later, I received a horrible email: Wal-Mart had canceled my order. Despite what the site had promised, the Xbox was indeed sold out. “We're sorry for any inconvenience this may cause you,” the email offered.


Late that afternoon, I did get my Xbox at Fry’s. (The store didn’t allow me to check inventory online or on the phone, but the salespeople were very nice and knowledgeable.) Given that I wasn’t injured in a stampede and I was eventually able to escape into Call of Duty, you could argue that I’m making too much of my Black Friday hassles. After all, wasn’t I the moron for expecting a pain-free shopping experience on the busiest day of the year?

I don’t think so. Almost a week later, I’m still annoyed at how terribly things went at Target, GameStop, and Wal-Mart. Black Friday is the retailers’ showcase, a time when they should do everything they possibly can to ensure they perform flawlessly—to inspire customers’ long-term loyalty by delivering more than they were expecting. What I love about Amazon is that it consistently does so. I’ll often select two-day shipping and get my item in one day. I’ll return something and get the money credited to my account immediately. Once, I called Amazon to complain that I hadn’t received a Kindle I’d ordered. The customer service rep arranged to send me a new one immediately—even though, as I later called back to explain sheepishly, the Kindle box had arrived and had simply been buried in a pile of unopened boxes in my office. (I get a lot of packages.)

Wal-Mart isn’t any less technically capable of providing that level of service. It’s got lots of smart executives and engineers working to make its digital services flawless. The difference is that Amazon’s e-commerce business consists of a single service—shipping stuff to your house from its many warehouses—that it has optimized to amazing ends. Wal-Mart, on the other hand, aims to do lots of different things. It wants to improve its in-store experience so it pairs better with your smartphone. It wants to ship stuff to your house as quickly as possible. It wants to let you order stuff and pick it up in the store without any hassle. If all these things worked, Black Friday would be a breeze: You’d walk in, be guided by your phone to all the stuff on your list, and pay for your purchase with a click of a button.

But doing all that is a logistical nightmare. For one thing, Wal-Mart would need to find a way to keep track of its products in a chaotic store, when people are moving stuff all over the place or hogging the items for hours in their carts. It also means retraining its millions of workers to make sure that—even in the depths of Black Friday chaos—they’re always knowledgeable and never less than friendly. And even then, things will go wrong. When you order something from Amazon, there are only a few potential points of failure: the site, the warehouse, and the shipper. At Wal-Mart, there are a billion: Every customer in every store could have a problem with any product or employee. It’s a wonder that the system works as well as it does.

This morning I spoke to Joel Anderson, the CEO of Walmart.com, about what happened on Friday. “I personally apologize for the experience you had, and I apologize for any other customer that might have experienced that,” he told me. Anderson explained that Wal-Mart had turned off same-day pickup on Thanksgiving Day. “We probably shouldn’t have turned it on Friday either,” he admitted. When I asked about why that Wal-Mart worker had pooh-poohed the website’s inventory listing, he said there were some “misaligned incentives” between store workers and Web orders. At the moment, in-store employees don’t get any credit toward their bonuses for sales made online but picked up in a store. Next year, though, Walmart is instituting a plan that will credit in-store employees with online sales. “We believe that’s a big step in the right direction to get associates equally focused on all types of orders,” Anderson says.

He also added that Walmart keeps getting better. On Monday—I’m sorry, “Cyber Monday”—the store saw a huge increase in same-day store pickups, and most of them went flawlessly, Anderson claimed. None of that would have been possible a few years ago. “We’ve come a long way in the last year and a half, and now we need to take it to the next level,” he said. “We’re going to keep leaning in until we get it right.”



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