Target's blunder with designer continues

#1
Target's Blunder With Designer Continues

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By Anne D'Innocenzio, Associated Press

Target is a victim of its own success.
Missoni for Target Event
Elizabeth Olsen attends the Missoni For Target
event, celebrating the Missoni for Target pop up
store, in New York.
Photo: Associated Press

The discounter drummed up so much hype around its exclusive, limited-time line by upscale Italian designer Missoni that its website crashed and was down most of the day on Sept. 13 when the collection was launched, angering customers. More than a week later, some shoppers who bought the Missoni for Target line are posting on social media websites Facebook and Twitter that they won't shop at Target again because their online orders are being delayed — or worse, canceled — by the retailer.

Brielle deMartino, 23, from Del Ray Beach, Fla., was so excited that she woke up at 6 a.m. on the launch day and spent $700 on Missoni clothes, a bike and plates. The next day, she got an email from Target that her online order was cancelled. Then, she spent hours on the phone with Target customer service representatives she describes as unapologetic.

"I have never been treated like this," says deMartino, who got the charges removed from her card after calling her bank and posted on Facebook and Twitter about the ordeal. "Instead of taking responsibility, they didn't care. I have always been pro-Target, but I don't want to give my money to a company like that again.'

Talk about having a bulls-eye on your back. Target became the discount industry's darling by making it cool to buy stylish clothes and trendy decorations at the same place you pick up toothpaste and paper towels. But recently, it has suffered from similar public relations nightmares as its rival Wal-Mart Stores Inc. Earlier this year, Target had its first union election in what is seen as a precursor to more labor disputes nationwide. Now, customers are blasting Target on websites like Twitter at a time when Americans worried about the economy are easily being influenced by what their friends say on social media websites.

"This was badly handled," said Robert Passikoff, president of Brand Keys Inc., a New York customer research firm that has an index that shows Target's image has taken a hit. "What was supposed to be engaging and delightful is now the opposite — disappointment."

Morgan O'Murray, a Target spokeswoman, said the company experienced unprecedented demand for the collection and is working on correcting problems.

"This demand impacted our Target.com site and affected the shipment and delivery of select guest orders," O'Murray said in a statement. "Providing an exceptional experience is incredibly important to Target, and we have a team dedicated to addressing those guests who have been affected."

The crash heard around retail
Missoni for Target Event
Photo: Associated Press

The Missoni collection was an attempt by Target to regain the cache it lost among the fashion-forward crowd after it began focusing on expanding its food business. Target is among a few retailers who have partnered with high-end designers that create exclusive lines they can offer for a limited time at deep discounts. The collections can spur demand by creating a sense of urgency to buy. Last year, Target scored big with a line created by Liberty of London, offering 300 items with the designer, which is known for its floral prints, and selling out of most of it in a couple of days.

The retailer tried to recreate that success with Missoni line, which featured stationery for $2.99 up to $599.99 patio furniture at a fraction of the cost of the designer's original works that can go for $595 to $1,500 and more. Target declined to comment say how much it spent on marketing, but it used social media websites and ads on TV and in Vogue magazine.

Target also opened a temporary store in Manhattan at the start of New York Fashion Week on Sept. 8. On the night of the store's opening, Target hosted a party attended by Missoni-clad celebrities like actress Elizabeth Olsen, the younger sister of the twin actresses Mary-Kate Olsen and Ashley Olsen. The temporary store, which spanned six blocks, was supposed to stay open three days, but closed after items sold out in six hours.

By Sept. 13, the day of the launch, Target said demand for Missoni items rivaled the frenzy on the day after Thanksgiving, which is typically the busiest shopping day of the year. More than 100 customers lined up at stores nationwide. Some locations sold out in a few hours.

Celebrities were even writing about the launch, or tweeting, on Twitter. Actress Busy Phillips, who plays Laura in ABC's "Cougar Town," tweeted: "Got the bike. Not the colorful one but still SO EXCITED." Actresses Jessica Alba and Jessica Simpson also were gushing about the line: "I dreamt about the Missoni 4 Target bike last night," Alba tweeted. Simpson replied, "I want that bike too!! So cute!"

The buzz turned to frustration for some shoppers. About two hours after the 6 a.m. launch, many on Target's website came face-to-face with Target's mascot bulldog and the disappointing news: "Woof! We are suddenly extremely popular. You may not be able to access our site momentarily due to unusually high traffic. Please stay here and we'll try to get you in as soon as we can!"

This happened throughout the day. Some who were patient got through. Those who weren't left the website disappointed.

Ben Rushlo, director of performance management at Keynote Systems Inc., which tracks websites' performance, said that he couldn't remember the last time a site stayed down most of the day. He said usually, a website slowly deteriorates throughout the day — with minor glitches becoming more prevalent — before crashing.

"It wasn't your normal meltdown," he said.

The Missoni mess gets messier

Even some customers who got through complained that items disappeared from their online shopping carts. Some were unable to checkout. Those who were able to buy breathed a sigh of relief, with some hocking their buys on eBay.com for more than double Target's prices.

But the celebration was short-lived for some. Twitter and Facebook are abuzz with customers complaining that they got emails from Target notifying them that their orders will be delayed or canceled altogether. The posts range from mild ("I'm waiting for orders and now get an email that some may not ship," to prickly ("Every time I see someone with Missoni for Target I get a little more mad.").

Megan Bonner, 26, from Memphis, Tenn., bragged on Twitter after ordering $300 worth of Missoni dresses and cardigans until the next day when she got emails telling her that her shipments would be delayed. Nervous that she wouldn't get the items at all, she bought some of them at a nearby Target. But now she worries she won't be refunded for the other merchandise.

"I feel violated. I feel taken advantage of," she said. "If I don't hear back from them in another week, I will call back. Maybe, I just won't go back anymore."

Target had planned to sell the line into October online and at all 1,700 U.S. stores. But many locations are sold out and the online pickings website are slim. Target had said it was replenishing merchandise, but that it would trickle in.

The debacle comes at a precarious time for Target. The chain, which has struggled to return to its pre-recession growth, is just beginning to benefit from its expanded grocery business and a 5 percent discount it gives shoppers who pay with a Target credit or debit card.

Target Corp., based in Minneapolis, had been posting disappointing revenue gains, but it had a 3.9 percent second-quarter increase in revenue at stores opened at least a year — a measure of a retailer's health. That compares with a 2 percent first-quarter gain.

Analysts disagree on whether Target's image can rebound from the snafu, which comes just months after a failed measure to unionize by employees at a Valley Stream, N.Y. spurred organizers to target stores nationwide.

C. Britt Beemer, chairman of America's Research Group said in order for Target to recover, it needs to placate angry customers by, say, offering $10 to $20 gift cards. "A lot of companies don't want to fix the problem," he said. "They feel it's better to let it go away. But the problem is that's a dangerous strategy."

Passikoff, with Brand Keys, says the damage is already done — and he can prove it. He said the negative publicity has pushed down Target's reading on the company's Loyalty Index, which measures brand reputation, among other things, to 109 from 119 in August. Brands should have at least a 116, Passikoff says, and anything under 100 signals "trouble."

But Brian Sozzi, a Wall Street Strategies analyst, says shoppers' discontent — much like the Missoni for Target line — is fleeting. "I think it is short-term anger," he said.
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#3
You what would have been a good idea? How about
A. make the stuff exclusive to the stores
B. have the stuff
C. spend some time and payroll getting stores back in decent shape before release
D. add payroll and staff the stores when it is released so we at least give the illusion that we still have short lines and have guest service
E. profit
 

commiecorvus

Former Signing Ninja
Staff member
Moderator
#5
We have to see how their PR folks handle this.
Passing out some gift cards by way of apology, seems like the least they could do all things considered.
I thought it was kind of interesting that the author, more then once, suggested another reason Target was loosing status had to do with the union vote in New York.
Sad to say, it hardly seems likely.
Except for union activists and progressives, nobody else seems to care ... even the people who really should.
 
#8
We have to see how their PR folks handle this.
Passing out some gift cards by way of apology, seems like the least they could do all things considered.
I thought it was kind of interesting that the author, more then once, suggested another reason Target was loosing status had to do with the union vote in New York.
Sad to say, it hardly seems likely.
Except for union activists and progressives, nobody else seems to care ... even the people who really should.
You know I used to champion the idea that Target couldn't truly afford to pay everyone that much more. Then I took a look at some of their recent financial information and found out I was horribly mistaken. Even though Target is expanding into Canada, they raked in ~700 mil in profits in the 2nd quarter, reduced bad credit debt from 100+ mil to 15 mil, and made 170+ mil in interest alone. They also bought back 1.5 bil of Target stock YTD. The nature of the accounting process removes much of that from profit. On top of all that profits were up 5% from last year.

Target has 355,000 employees. Out of those, how many are hourly in the stores? I bet you they could pay an extra 2 or 3 dollars an hour (25%-35% increase for stores in areas with average cost of living) and not break a sweat. I don't have access to any financial reports later than 2009, but in fiscal year 2009 Target had sales revenue of 63 billion. They claimed a profit of 2.4 billion after all expenses, taxes, etc were paid. Debt is roughly 15 bil including long term however the shareholders capital comes out to slightly above 15 bil and covers it.

Basically Target could afford to pay a lot more but due to the economy, great propaganda, and frankly no need to pay more, they don't. As much as I champion capitalism it sucks that companies have unskilled/under skilled/transitional workers by the balls.
 
#9
oops never mind I accidentally forgot to add a zero to my calculations. They could increase wages a dollar or two an hour but it would reduce their financial outlook significantly and have a negative effect on stock price and trading as well as hindering their explosive growth plan. Every extra dollar an hour would cost 250-600 million per year.
 
#10
oops never mind I accidentally forgot to add a zero to my calculations. They could increase wages a dollar or two an hour but it would reduce their financial outlook significantly and have a negative effect on stock price and trading as well as hindering their explosive growth plan. Every extra dollar an hour would cost 250-600 million per year.
I was about to call you out!!
 
#11
I bet to be quite honest Spot didn't know this stuff was going to be that big of a hit. Calypso wasn't a big hit ( at least not in my area) Liberty was so-so. Spot probably thought half of this ugly stuff would of gone clearance and salvage much less someone actually buy it so they didn't make as much. That's how I see it anyway lol
 
#13
You know I used to champion the idea that Target couldn't truly afford to pay everyone that much more. Then I took a look at some of their recent financial information and found out I was horribly mistaken. Even though Target is expanding into Canada, they raked in ~700 mil in profits in the 2nd quarter, reduced bad credit debt from 100+ mil to 15 mil, and made 170+ mil in interest alone. They also bought back 1.5 bil of Target stock YTD. The nature of the accounting process removes much of that from profit. On top of all that profits were up 5% from last year.

Target has 355,000 employees. Out of those, how many are hourly in the stores? I bet you they could pay an extra 2 or 3 dollars an hour (25%-35% increase for stores in areas with average cost of living) and not break a sweat. I don't have access to any financial reports later than 2009, but in fiscal year 2009 Target had sales revenue of 63 billion. They claimed a profit of 2.4 billion after all expenses, taxes, etc were paid. Debt is roughly 15 bil including long term however the shareholders capital comes out to slightly above 15 bil and covers it.

Basically Target could afford to pay a lot more but due to the economy, great propaganda, and frankly no need to pay more, they don't. As much as I champion capitalism it sucks that companies have unskilled/under skilled/transitional workers by the balls.
Maybe Gregg should give up some of HIS total compensation...
CEO Pay Database
Gregg W. Steinhafel
Chairman President & Chief Executive Officer
TARGET CORP (TGT)
Headquarters: MINNEAPOLIS, MN
General Merchandise Stores

2010 Compensation

2010

Salary $1,500,000
Bonus $1,200,000
Value of Stock Awards $8,017,549
Value of Option Awards $3,189,299
Non-Equity Incentive Plan Compensation $4,101,000
Change in Pension Value and Deferred Compensation Earnings $480,689
All Other Compensation $5,501,346
Total $23,989,883
 

Rock Lobster

Executive Team Leader
Staff member
Moderator
#14
I think the Missoni stuff was a joke... I even thought, great a bunch of clearance we are going to have to move to back endcaps in a few weeks! I laugh at people complaining... we didn't have an unlimited supply and Target didn't take anyone's freakin money! They make it sound like we charged people for all the crap they bought but didn't ever send it... and there is a line about a lady who got nervous after her order, went to the store to buy some, and is now nervous she is going to have two of everything! That is her own damn problem lol
 
B

Barcode

Guest
#15
Lol at all the people getting mad over Missoni... Fact of the matter is that Target made a ton of money, and most of these crybabies will be back after they've cooled their jets.
 

redeye58

Hasta Ba Rista, Baby!
#16
Now the women who ordered on-line are returning Missoni so it will be marked down & they swoop in to re-purchase it even cheaper before reselling it on eBay.
Any body know of a way to override this? There's plenty of functions to mark items DOWN but not UP. Sure, I could just leave the ticket off but some of these items are on-line exclusive. Is there a way to print a ticket with DPCI & orig price w/o the system wanting to apply the auto-markdown?
 
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