The following five retailers have something in common, and it's not something positive. These companies are Office Depot (ODP +0.00%), L Brands (LB +8.48%), Cabela's (CAB +0.00%), Sears (SHLD +0.00%), and Lululemon (LULU +2.63%). Since product offerings for these five companies vary greatly, you might be wondering what they might have in common. The answer may surprise you.
Closing its doors by accident
It's the holiday shopping season and you would like to purchase an office chair for a loved one at Office Depot, but you don't feel like traveling to the store due to the heavy traffic and time constraints. Therefore, you choose to visit OfficeDepot.com instead. The only problem is that OfficeDepot.com isn't operational. You feel let down, and you choose to shop at a competitor instead. Office Depot loses reliability, present sales, and potentially future sales.
According to Panopta.com -- which monitors website performance every minute -- OfficeDepot.com has been down for five hours and 19 minutes during this holiday season. While the site's uptime is still 99.31%, it's a near certainty that the company lost potential customers during those five hours and 19 minutes.
Office Depot isn't the only retailer that suffered website outages so far this holiday season.
A secret no more
VictoriasSecret.com, which is owned by L Brands, has been down for four hours and 27 minutes during this holiday shopping season. Hopefully, the strong showing for the annual Victoria's Secret Fashion Show featuring Taylor Swift will offset this hiccup. According to Nielsen, the show had 9.71 million viewers and its total viewership increased 2% over last year. Taylor Swift is seen as a role model by many young females, and this could prove to be a positive catalyst for the brand.
Missing the target
Cabelas.com has been down for three hours and 12 minutes so far this holiday season. While this is a negative, even though Cabela's has to live up to record gun sales in 2012, it should only be a matter of time before the gun control debate heats up in the political arena once again. This will drive gun sales since many consumers will fear that many guns won't be available for lawful purchase in the future. That being the case, a potential positive catalyst remains in play for Cabela's.
The next retailer that suffered a website outage has been in dire straits of late.
No longer dominant
Sears.com has been down for three hours and 14 minutes this holiday season. Sears can't seem to get out of its own way. If the company is to succeed, then it must perform well online without a hitch. The one piece of good news here is that according to Alexa.com, pageviews-per-user for Sears.com has only declined 0.39% over the past three months. This might not seem like a positive, but considering many recent trends for the retailer, it shows that Sears might at least have some potential online.
If you enjoy drama, then you will love following the next retailer.
Drama central
Lululemon.com has been down for one hour and 57 minutes this holiday season. This is the last thing Lululemon needs considering its recent see-through yoga pants recall, increased competition after Gap launched its Athleta brand, and a recent CEO change. Fortunately for the company, not that many people were aware of the outage. However, even though the outage took place over a small time frame, it's not going to help Lululemon's sales, or its reputation.
Online shopping trends
If a retailer wants to maximize its online potential, then its website must have 100% uptime. According to Shop.org, online holiday spending is expected to jump 13%-15% this year over last year's holiday shopping season. With consumers consistently shopping online more often, a retailer must offer the ultimate online shopping experience. Of course, this isn't possible if the website isn't accessible.
Also keep in mind that these website outages might have a small impact on this quarter's sales. However, this is more about consumers determining whether or not a retailer's website is reliable or not.
Looking at the top-line performance comparison chart below, Office Depot and Sears can least afford any type of slip-up:
ODP Revenue (TTM) data by YCharts
Based on this chart, Lululemon is still growing its top line despite several headwinds, Cabela's is more than holding its own, and L Brands is still seeing demand for its products in a difficult consumer environment. All that said, the best operations aim for perfection. While no company is perfect, Amazon.com, Costco.com, eBay.com, Macys.com, and Target.com have delivered 100% uptime on their websites during this holiday shopping season. If you look at these two groups: those with website outages vs. those without website outages, it doesn't appear to be a coincidence that the latter group contains extremely well-run operations that have historically delivered for investors.
