Flipkart's Big Billion Day: Big Day, Hard Lessons

The Flipkart Big Billion 'Blunder' has been much discussed both online and off it. afaqs! looks at what actually went wrong.

On October 6, people woke up to what was touted as the 'Biggest' online discount sale ever. Publicised heavily in the lead up to the big day, Flipkart's 'Big Billion Day' sale did get talked about across social media, but more for the wrong reasons.

The curtain rose at 8 am and by afternoon, most of the products on discounts were sold out. Many consumers, having risen early, were left rather disappointed as the best deals were over within seconds. Fifteen minutes into the sale, the 'steal deal' section, offering the biggest discounts, flashed an 'out of stock' message.

High and dry

Consumer complaints ranged from technical errors to pricing scams to lack of product variety. The site crashed once and order placements were marred by glitches. Moreover, the ratings and review options went missing from many products. To make matters worse, Flipkart, it was alleged, did not offer refund or cancellation options.

Buyers claimed that the deals advertised in newspapers were not available on the website. The biggest grievance, however, was that prices on the website were inflated over the past couple of days and, therefore, the discounts were not genuine.

Hashtags such as #Flopkart, #bigbillionday, and #flipkart started doing the rounds on social media.

This kind of publicity was something Flipkart could have done without considering that the event was coming at the end of a 15-day-long campaign that had whetted the appetite of millions of consumers - it was expected to be the equivalent of the heavily-discounted Black Friday sale (held in November after Thanksgiving) in the US. The company had also declared that it had enhanced its tech capabilities, inventory, and supply-chain capacities. So what went wrong?

Marketing success, delivery failure

If Flipkart's objective was to extend its reach to people who had never shopped on its platform and make them visit the website at least once, it was a massive success. "But no discount run can be successful if you do not have transactions. Though Flipkart might claim big sales numbers, the negative impact the episode had on the brand was much more than the moolah earned," opines K Vaitheeswaran, currently an e-commerce consultant and founder of Indiaplaza, India's first e-commerce website.

Founders Sachin and Binny Bansal have no doubts. "Our teams and sellers worked days and nights to make this sale a success and our efforts paid off. We got a billion hits on our site and achieved our 24-hour sales target of $100 million in just 10 hours. We are truly humbled by the immense faith our customers have shown in us. And this inspires us to dream bigger," they said.

What was a marketing and sales success became a branding failure as Flipkart could not convert prospective customers into satisfied ones. "Flipkart has been flirting with the idea of creating real or artificial scarcity for a while now. It started with MI phones selling out in a few seconds and peaked with the Big Billion Day sale. While this approach has its advantages of making customers feel they will lose something if they don't act quickly, it is fast turning into a gimmick. With thousands of dissatisfied customers running havoc on social media, Flipkart will have to be careful if it has to hold on to customers in an industry where customer loyalty is fickle," states Saurabh Uboweja, founder, CEO and director, Brand Strategy, Brands of Desire.

Inevitably, however, deals such as these are limited in nature and there will be disappointment when people miss out. "This is quite common during Black Friday shopping. People queue up even before stores open in the race to grab the best deals before stocks go. And those who don't get them are angry and upset. Since the concept is happening for the first time in India, this led to many disappointed customers. But I think it is a part of the education of shoppers and the next time, both consumers and Flipkart, will be better prepared," feels Sanjay Mehta, joint CEO, Social Wavelength.

Caught napping?

Though a lot of hype was built up, what went against Flipkart was its lack of anticipation of the response this event would generate. "Flipkart didn't have the product ready for fulfilling the promise," says Vaitheeswaran. It was also caught on the wrong foot as far as the delivery mechanism went. "It hurts the trust that Flipkart has built over the years," adds Uboweja.

With Flipkart leading the discount charge, competitors too followed suit. Unfortunately, when the leader of the pack faltered, the consumers' ire hit them first. Amazon and Snapdeal seem to have gained the most from Flipkart's troubles. Snapdeal tried to fill the gap with better discounts, offers and services. Amazon - in the midst of its Diwali sale - had products listed at much lower price points compared to Flipkart.

Kunal Bahl, co-founder and CEO Snapdeal.com, said that Snapdeal had a record-breaking day on October 6. "We witnessed sales of over Rs 1 crore a minute. We were trending throughout the day on Twitter and the App Stores, receiving phenomenal positive feedback from customers. Over a million Snapdeal apps were downloaded in one day. The best part of the day: we didn't really spend much to bring customers to Snapdeal," adds Bahl.

Bigbillionday.com stole the thunder from Flipkart further. Users who typed www.bigbillionday.com were redirected to www.amazon.in, leading to industry-wide speculation that Amazon was behind this ambush marketing exercise. The company denied any role in this.

Sameer Parwani, founder and CEO, CouponDunia, thinks that it was a classic case of ambush marketing. "When you are such big industry players, you definitely need to be on top of your game and I think all them did pretty well. In fact, our website received maximum traffic yesterday." Parwani, however, feels that the social media backlash was bound to have happened after such a large-scale effort. He is more forgiving of Flipkart. "I think the consumers need to understand and be patient. People need to be ready for the fact that they may get some good deals or lose some. It is luck if you manage to grab something on first come first basis," he adds.

The lessons

There are three things that Flipkart could have done when the situation went out of hand. Once the criticism started coming in, it could have issued a statement to clear the air. On the other hand, this double-edged sword could easily exasperate the customers even more and lead to more complaints. "Quite often, it may be best to be quiet and let sentiments simmer down on their own. Which is what Flipkart chose to do, more or less," states Mehta.

Flipkart founders did send out a letter the next evening of the sale apologising to customers for the glitches. It also touched upon the various pain points faced by consumers and responded to allegations of jacking up prices. According to Vaitheeswaran, there was not much left for Flipkart to do once the social media backlash happened. "The event generated the buzz through offline media and it wouldn't have made much sense to communicate with the consumers online during the sale," he adds.

There were lessons for other ecommerce/retail brands too. It is important for brands to educate consumers about their promotions, the limitations and the opportunities in a better way, so that the consumers are not surprised. Besides, brands can engage in open conversation to ensure clarity and the right perspective and stem the negative flow, as much as they can. The e-commerce industry, of late, is gaining the reputation of a greed-led business design. While it is good for customers in the short term, it is not sustainable for any stakeholder in the chain in the long term.

However, amidst all the flak, Flipkart did get its share of support. "The fact that they managed to get the entire industry, including offline retailers, chasing after them, the fact that they managed to get the country's online shoppers heading to their website and the fact that they clocked some great revenue numbers on the day means that they succeeded to a large extent. Just as Big Bazaar has created 15th August/26th January as shopping days in the offline world, Flipkart may well have created its own version of Black Friday for India's online shoppers," concludes Mehta of Social Wavelength.