HP’s TouchPad Fire Sale Sends a Warning to Web Retailers

Many Sites Fail to Cope with Huge Demand for Discounted TouchPads

Watching the precipitous drop in the price of HP’s TouchPad has been interesting, especially now UK retailers have started to slash their prices. Last night I monitored how different retailers’ Web sites coped with the sudden demand.

Dixons, Currys and PC World (all part of DSG Retail) kicked things off at 6 PM, when they dropped the price for a 32GB model to £115. As far as I could tell, they had fairly low stocks and sold out within an hour. Buying items for collection at a store on DSG Retail Web sites involves a guessing game uncannily like the Monty Python “cheese shopsketch. You have to enter a postcode; the site tells you there’s no items in stock at the nearest stores, and invites you to try again.

While this was going on, the price on Amazon dropped from £429 to £305.

Then Carphone Warehouse and Best Buy UK cut their price to £115. Word had got round quickly. Carphone Warehouse’s site soon showed an interstitial saying that the site was down for maintenance, while Best Buy quickly ran out of stock. The Carphone Warehouse site came back online to report that stock had been depleted there too.

Around 9 PM, Comet marked the 32GB TouchPad down from £429 to £115. As on many of the other sites, users could select the item but were then unable to check out.

At this point the stock level on Amazon dropped to low single digits and its price went back up to £429.

Through all of this there were some quite noticeable differences in site performance. My comments are not based on scientific testing, but reflect personal experiences while visiting the sites as well as comments made by online buyers and potential buyers.

In my experience, the Web sites of Tesco Direct, Carphone Warehouse and Argos were very slow to reload, sometimes throwing an error instead of loading the page. Dixons, Comet, PC World, Currys, Staples and John Lewis were poor — generally slow and some with problems at the checkout.

Dabs (a subsidiary of BT), Misco, Buy-HP and Insight all refreshed fairly quickly, perhaps because they hadn’t discounted the TouchPad yesterday and were not experiencing heavy usage.

Top of the list were BT and Amazon, which both continued to display pages quickly during the entire evening.

It’s tempting to think of this as purely load-based, with the worst performance coming from those under heaviest load. That would be true if Amazon hadn’t emerged well in my unscientific survey – there were rumours of discounts on Amazon, it had been a major supplier of discounted TouchPads in the US, the price changed during the evening and the site must have experienced heavier than normal traffic.

Both BT and Amazon are major cloud services providers, and it appears that they “eat their own dog food”. Other retailers should look carefully at the benefits of greater scalability of infrastructure, especially those relying solely on the Internet for business.

Tesco uses Akamai cloud services for some of its site functions. Carphone Warehouse, Comet and DSG Retail are working with SpareBackup to provide cloud services to their customers. John Lewis uses cloud computing for a new customer appointments system. Staples has an IT services division and offers cloud services to small and medium-sized businesses. None of them appears to make adequate use of cloud computing for dealing with heavy traffic on their main site.

Any retailer that shrugs off the HP TouchPad clearance sale as an isolated event that doesn’t justify increased spending on its Web site would do well to read the Tweet shown below.