4 ms·

The key part to this article is at the very end, and not addressed in the title (of course)....they extended their sales till the next day. Anyone who couldn't

by fma 7y ago

The key part to this article is at the very end, and not addressed in the title (of course)....they extended their sales till the next day. Anyone who couldn't place an order (like me) did it later. So I'd argue it did not cost Costco $11 million...

trav4225 7y ago
yeah, i always think the same thing when i see loss figures in situations like this...
purple-again 7y ago
Most likely only a small fraction of the people who were going to make a purchase heard this news and only a fraction of them decided to follow through and purchase the next day.
- jhwhite 7y ago
  I was looking at one of their fridges that was on Black Friday sale and couldn't get the page to load. I had no idea they extended until today.
- arcticfox 7y ago
  That's not actually true, since the website had a message saying it while suffering. I also finished my purchase the next day.
  - orev 7y ago
    You can’t really say “it’s not true” since you need facts to make that kind of statement, and I doubt you have access to the data one would need to come to that conclusion. It’s very easy to postulate that people would go to another site (e.g. Amazon) immediately instead of waiting around to see if the Costco site would recover, especially since most BF deals are limited by both time and quantity. That alone makes the loss estimates feasible.
    - arcticfox 7y ago
      > Most likely only a small fraction of the people who were going to make a purchase heard this news This is the part I was referring to as "not actually true". Fact: the site itself, which was loading although not working entirely, displayed a big banner saying this during the problem periods. It was hard to miss. The rest is indeed just speculation either way. I doubt the losses are as high as estimated, but there's no way to say without inside data.
- orev 7y ago
  It took a lot of patience and persistence to get something added to my cart and complete the checkout, so I can easily see many people abandoning the process. Though they did send a reminder email about the abandoned shopping cart, so that might have helped get some people back.
cududa 7y ago
When I’m doing Christmas shopping I have no tolerance for malfunctioning websites, I just jump over to some similar service with similar pricing
- lol768 7y ago
  > When I’m doing Christmas shopping I have no tolerance for malfunctioning websites, I just jump over to some similar service with similar pricing I suppose the difference with Costco is the sunk cost (membership fee) that means you're probably more likely to want to get your money's worth.
  - ianai 7y ago
    Costco members are pretty loyal and known to be so. They offer cash back as an incentive.
  - FussyZeus 7y ago
    It's not just sunk cost fallacy. Everything I've bought from Costco has been at least "good" with most of the products pushing into "great" territory. The curation is one of the benefits of the membership. Especially in the era of Amazon shoving counterfeits every which way for every conceivable product, it's nice to have at least one retailer that isn't just hawking shelf space to anyone with a dollar and crap to sell.
    - ChuckMcM 7y ago
      I certainly resonate with this. In California the CostCo membership pays for it self with gas purchases so there isn't as much 'sunk cost' as you might think. Their product quality, and return policy has consistently impressed me as Amazon has gotten worse at this.
  - bsder 7y ago
    If you need to replace your car tires, you sink that membership several times over in one shot. Everything afterward is just a plus.
PretzelFisch 7y ago
Since they had the same issues running the site the next day as well It may still be close to that 11 million.
Reedx 7y ago
Exactly. Stories about websites losing $N per minute tend to be examples of how to lie with statistics.
- takeda 7y ago
  Yeah some people determined like me probably tried over and over until it succeeded, it was a bit scary clicking refresh during the actual payment (although was monitoring my credit card charges, was prepared to cancel extra orders and at worst return extra stuff) , fortunately it went only once despite multiple refreshes until I saw the confirmation page. Other people probably just went directly to stores.
- kyllo 7y ago
  It's a cost model, they probably have a coefficient for what % of people they think will wait vs. go elsewhere while the website is down. When you're running a retail company, you have to at least attempt to quantify lost sales in order to model your business. There's no way to measure lost sales with high accuracy, but that's not really the point, because it's most useful for modeling decisions and policies in a forward-looking context. Future revenue forecasts, the other term in the equation you're optimizing, are also inaccurate. These functions are also generally "bathtub" shaped, and with the amount of money at stake, you can save quite a lot by being a little closer to the optimum, so they're worthwhile.
leetcrew 7y ago
this might be true for products where costco was offering a much better price, but I'm sure there were also plenty of annoyed customers who just bought the item somewhere else for a slightly lower discount. presumably there is some way of approximating this ratio and using it to adjust these kinds of loss estimates. I guess lovethesales.com might choose not to adjust the figures in order to report a juicier story.
- trunc 7y ago
  There doesn't even have to be a 'the item'. If someone spent their budget, or spent enough to feel guilty about spending more, they're a lost sale.
deleted 7y ago
[deleted]
KallDrexx 7y ago
Anecdotally, my step mom was trying to buy 2 apple watches from Costco and gave up after an hour of trying to get through the cart. I realized that Amazon had them for the same price, so she bought it from there instead. So there are at least some lost sales by people shopping elsewhere. It's rare that a specific price is only offered by only one retailer for a product.
- o-__-o 7y ago
  Problem is Costco high price products came with 5 year warranties so it’s a nobrainer to just first try going to the store then ordering online. I suspect a lot of people did that prompting even more sales (I bought house stuff I didn’t even need, I was just mad they didn’t have my tv and I drove all the way out there)
chiefalchemist 7y ago
Perhaps. But I'd argue they lost more. That is, next time, many of those people will go elsewhere first and then Costco as a last choice option.
m463 7y ago
I suspect a lot of problems are like that. Store too crowded? Website slow or down? Something out of stock? Business not lost, people just come back later.

by fma 7y ago

trav4225 7y ago

yeah, i always think the same thing when i see loss figures in situations like this...

purple-again 7y ago

Most likely only a small fraction of the people who were going to make a purchase heard this news and only a fraction of them decided to follow through and purchase the next day.

jhwhite 7y ago
I was looking at one of their fridges that was on Black Friday sale and couldn't get the page to load. I had no idea they extended until today.
arcticfox 7y ago
That's not actually true, since the website had a message saying it while suffering. I also finished my purchase the next day.
- orev 7y ago
  You can’t really say “it’s not true” since you need facts to make that kind of statement, and I doubt you have access to the data one would need to come to that conclusion. It’s very easy to postulate that people would go to another site (e.g. Amazon) immediately instead of waiting around to see if the Costco site would recover, especially since most BF deals are limited by both time and quantity. That alone makes the loss estimates feasible.
  - arcticfox 7y ago
    > Most likely only a small fraction of the people who were going to make a purchase heard this news This is the part I was referring to as "not actually true". Fact: the site itself, which was loading although not working entirely, displayed a big banner saying this during the problem periods. It was hard to miss. The rest is indeed just speculation either way. I doubt the losses are as high as estimated, but there's no way to say without inside data.
orev 7y ago
It took a lot of patience and persistence to get something added to my cart and complete the checkout, so I can easily see many people abandoning the process. Though they did send a reminder email about the abandoned shopping cart, so that might have helped get some people back.

cududa 7y ago

When I’m doing Christmas shopping I have no tolerance for malfunctioning websites, I just jump over to some similar service with similar pricing

lol768 7y ago
> When I’m doing Christmas shopping I have no tolerance for malfunctioning websites, I just jump over to some similar service with similar pricing I suppose the difference with Costco is the sunk cost (membership fee) that means you're probably more likely to want to get your money's worth.
- ianai 7y ago
  Costco members are pretty loyal and known to be so. They offer cash back as an incentive.
- FussyZeus 7y ago
  It's not just sunk cost fallacy. Everything I've bought from Costco has been at least "good" with most of the products pushing into "great" territory. The curation is one of the benefits of the membership. Especially in the era of Amazon shoving counterfeits every which way for every conceivable product, it's nice to have at least one retailer that isn't just hawking shelf space to anyone with a dollar and crap to sell.
  - ChuckMcM 7y ago
    I certainly resonate with this. In California the CostCo membership pays for it self with gas purchases so there isn't as much 'sunk cost' as you might think. Their product quality, and return policy has consistently impressed me as Amazon has gotten worse at this.
- bsder 7y ago
  If you need to replace your car tires, you sink that membership several times over in one shot. Everything afterward is just a plus.

PretzelFisch 7y ago

Since they had the same issues running the site the next day as well It may still be close to that 11 million.

Reedx 7y ago

Exactly. Stories about websites losing $N per minute tend to be examples of how to lie with statistics.

takeda 7y ago
Yeah some people determined like me probably tried over and over until it succeeded, it was a bit scary clicking refresh during the actual payment (although was monitoring my credit card charges, was prepared to cancel extra orders and at worst return extra stuff) , fortunately it went only once despite multiple refreshes until I saw the confirmation page. Other people probably just went directly to stores.
kyllo 7y ago
It's a cost model, they probably have a coefficient for what % of people they think will wait vs. go elsewhere while the website is down. When you're running a retail company, you have to at least attempt to quantify lost sales in order to model your business. There's no way to measure lost sales with high accuracy, but that's not really the point, because it's most useful for modeling decisions and policies in a forward-looking context. Future revenue forecasts, the other term in the equation you're optimizing, are also inaccurate. These functions are also generally "bathtub" shaped, and with the amount of money at stake, you can save quite a lot by being a little closer to the optimum, so they're worthwhile.

leetcrew 7y ago

this might be true for products where costco was offering a much better price, but I'm sure there were also plenty of annoyed customers who just bought the item somewhere else for a slightly lower discount. presumably there is some way of approximating this ratio and using it to adjust these kinds of loss estimates. I guess lovethesales.com might choose not to adjust the figures in order to report a juicier story.

trunc 7y ago
There doesn't even have to be a 'the item'. If someone spent their budget, or spent enough to feel guilty about spending more, they're a lost sale.

deleted 7y ago

[deleted]

KallDrexx 7y ago

Anecdotally, my step mom was trying to buy 2 apple watches from Costco and gave up after an hour of trying to get through the cart. I realized that Amazon had them for the same price, so she bought it from there instead. So there are at least some lost sales by people shopping elsewhere. It's rare that a specific price is only offered by only one retailer for a product.

o-__-o 7y ago
Problem is Costco high price products came with 5 year warranties so it’s a nobrainer to just first try going to the store then ordering online. I suspect a lot of people did that prompting even more sales (I bought house stuff I didn’t even need, I was just mad they didn’t have my tv and I drove all the way out there)

chiefalchemist 7y ago

Perhaps. But I'd argue they lost more. That is, next time, many of those people will go elsewhere first and then Costco as a last choice option.

m463 7y ago

I suspect a lot of problems are like that. Store too crowded? Website slow or down? Something out of stock? Business not lost, people just come back later.