Zappos site messes up pricing, then shows sense of humor in dealing with it

This is a posting from Zappos' site 6pm.com dated May 2010.

Hey everyone – As many of you may know (and I’m sure a lot of you do not), 6pm.com is our sister site.  6pm.com is where brandaholics go for their guilt free daily fix of the brands they crave.  Every day, the site highlights discounts on products ranging up to 70% off.  Well, this morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95.  The mistake started at midnight and went until around 6:00am pst.  When we figured out the mistake was happening, we had to shut down the site for a bit until we got the pricing problem fixed. 

While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost.  However, it was our mistake.  We will be honoring all purchases that took place on 6pm.com during our mess up.  We apologize to anyone that was confused and/or frustrated during out little hiccup and thank you all for being such great customers.  We hope you continue to Shop. Save. Smile. at6pm.com. 

Cheers!

Aaron Magness

Director of Brand Marketing & Business Development

Zappos Development, Inc.

Twitter: @macknuttie

Update: Upon further investigation and clarification with our merchandising team, I realized that the statement about "capping everything on the site at $49.95" was not 100% accurate. There are some items that are sold on both 6pm.com and Zappos.com, and those items were not affected by the pricing mistake. The pricing mistake applied to items sold on 6pm.com but not Zappos.com (the vast majority of inventory available on 6pm.com). The actual dollar figure of our loss is accurate - over $1.6 million. Let's just say this was not a boring weekend for us.

Update 2: We've received a number of inquiries asking for more details as to what happened, so here are more details from Tony Hsieh (CEO, Zappos.com, Inc.):

We have a pricing engine that runs and sets prices according to the rules it is given by business owners. Unfortunately, the way to input new rules into the current version of our pricing engine requires near-programmer skills to manipulate, and a few symbols were missed in the coding of a new rule, which resulted in items that were sold exclusively on 6pm.com to have a maximum price of $49.95. (Items that are sold on both 6pm.com and Zappos.com were not affected.)

We already had planned on improving our internal pricing engine so that it will have a much easier-to-use interface for our business owners. We are also planning on adding additional checks and balances to hopefully prevent this type of thing from happening again.

To those of you asking if anybody was fired, the answer is no, nobody was fired - this was a learning experience for all of us. Even though our terms and conditions state that we do not need to fulfill orders that are placed due to pricing mistakes, and even though this mistake cost us over

$1.6 million, we felt that the right thing to do for our customers was to eat the loss and fulfill all the orders that had been placed before we discovered the problem.

PS: To put an end to any further speculation about my tweet (

http://twitter.com/zappos/status/14576863056 ), I will also confirm that I did not, in fact, eat any ice cream on Sunday night.

Tony Hsieh

Follow me on Twitter: http://twitter.com/zappos My new book:http://deliveringhappinessbook.com

Hat tip to Positive Sharing.

Amir Rao of Supergiant Games: Users had "no idea what was happening" when using gardening feature

This mistake story from the GDC 2012 "Failure Workshop" was captured by Kris Graft of Gamasutra, a gaming industry site:

Next up for the [failure] workshop was Amir Rao of Supergiant Games. The studio did ship its first title, Bastion, to much success. But what's not known by most people is that it shipped without one big feature that failed.

Basiton had a rich art style, a unique reactive narrator, and, Rao said, "It was going to have a rich and exciting gardening feature."

The reasons for including this feature were clear for Rao. "Gardening is an aesthetic that everybody understands. ... We wanted to try and take that aesthetic ... and apply that to an action RPG, because that is something that we haven't seen before."

The studio spent a year working on the gardening feature, influenced by games like Viva Pinata, Harvest Moon, and even certain systems from Civilization Revolution.

Player would find seeds out in the world, bring them back to the hub called Bastion, put them in planters, water them, and wait to see what they would become. The problem was that players had "no idea what was happening," said Rao. "It's really hard to communicate the intermediate part of planting" that happens between burying the seed, and having the final plant.

"You know people understand a lot better than planting? A menu," Rao determined.

I empathize with Rao's disconnect with his users, and respect his recognition that the gardening feature wasn't working. It's easy for a product developer to fall in love with certain features, and hard to finally decide to take them out.

Mistake mini-story: Wesabe

This story comes from a NY Times article, "How Six Companies Failed to Survive 2010" and concerns one of those companies, personal finance website Wesabe.

WHAT WENT WRONG Ten months after Wesabe’s introduction, a competitor, Mint.com, appeared. As [co-founder Mark] Hedlund acknowledges, Mint had a better name and better design and was easier to use. Within nine months, Mint had 300,000 users and $17 million in venture financing. In 2009, Mint was sold to Intuit for $170 million.

LOOKING BACK Mr. Hedlund wishes he had simplified the consumer’s experience. “We wanted to help people,” he said, “but it was too much work to get that help.”

[Hat tip Tim Berry]