MINNEAPOLIS — Best Buy gave its online customers just about the worst news possible four days before Christmas: Your order has not been filled.
The Richfield, Minn.-based retailer said in a statement that it will not be able to process some of its online orders by today, including some made the day after Thanksgiving.
“Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders,” it said. “We are very sorry for the inconvenience this has caused, and we have notified the affected customers.”
It is not clear how many orders have been affected or how large a range of products is involved. Best Buy spokeswoman Lisa Hawks declined to answer questions beyond the statement.
In addition to TVs, iPads also appeared to be on back order, as well as other tablets, cameras, laptops, PS3 games and the Nintendo Wii.
The shortages are a black eye for Best Buy, which has beefed up its online campaign to fight off intense competition from online retailers and discount stores. And the holiday season is crucial for retailers such as Best Buy because it can make up to 40 percent of annual sales.
“It is a hiccup for the company,” said Morningstar analyst R.J. Hottovy. “They were kind of behind the curve building out their online channel. They’ve done a good job investing in it, but if you make a lot of rapid changes, inevitably there are going to be growing pains.”
The canceled orders probably won’t make a big difference for Best Buy’s holiday sales this year, but it may lead to more customers looking elsewhere in the future, he said.
“The risk is any consumers affected by canceled orders will be willing to explore other alternatives for online shopping in years to come,” Hottovy said.
CEO Brian Dunn has been under pressure to deliver a strong holiday season after a year of strategic missteps in overseas markets ranging from China to the United Kingdom. Since Dunn became CEO in June 2009, Best Buy shares have fallen nearly 40 percent.
Best Buy shares sank this month when the company surprised Wall Street with disappointing earnings attributable to a shift in strategy that focuses on market share over profit margins. In order to compete, Best Buy has expanded its online offerings, cut back on square footage in the U.S. by closing stores and sought to expand internationally. In its most recent third quarter ending Nov. 26, Best Buy said its net income fell 29 percent as it cut prices in popular categories such as tablets and TVs to drive sales and traffic during the holiday season.
Online issues have become more high profile for businesses this year as sales have grown. Earlier this year, Minneapolis-based Target had two well-publicized online gaffes when it launched its own online site after a decade of outsourcing service from Amazon.com. The site crashed in September, during the launch of the Missoni line of designer apparel and accessories, and again in October.
The nation’s second-largest retailer suggested this week that online is holding its own for the holiday season.
“Our team is working around the clock to ensure our guests receive their items by Christmas,” said Target spokesman Lee Henderson, who declined to categorize online volume this year.
The Associated Press contributed to this report
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