Fallout from Finish Line E-Commerce Failure Accelerates

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Fallout from Finish Line E-Commerce Failure Accelerates

By Adam Blair - 02/12/2013
The recent departure of Finish Line Chief Digital Officer and executive vice president Christopher Ladd is the latest bit of fallout from the retailer's recent e-commerce snafu, which has cost the retailer $3 million (and counting) in lost sales during holiday 2012. Ladd resigned effective February 1 with no comment from the company except that it is seeking a replacement, according to published reports.

There are strong indications that Ladd's departure won't be the last piece of bad news associated with Finish Line's digital debacle. Sources have revealed to RIS News that relations between Finish Line and its key e-commerce vendor partners have been strained by the incident.

The retailer went live with a new e-commerce platform November 19 and almost immediately began noting poor customer experiences, lower-than-expected online conversion rates and high downtime levels. The issues were severe enough that Finish Line was forced to revert to its legacy e-commerce technology, which it had continued to run in parallel as per industry best practices, after only three weeks. The retailer lost approximately $3 million in sales during the last few weeks of its third fiscal quarter, which ended December 1, 2012.

The tally of total losses is likely to be even higher since the poorly performing platform continued to be used until December 6, nearly a week into the retailer's fiscal Q4. In addition, providing a poor customer experience during some of the busiest e-commerce days of the season, including Black Friday and Cyber Monday, will create negative ripple effects on customer loyalty that go beyond countable losses. This is particularly true since Finish Line customers were not shy about sharing their frustration and disappointment with the site's performance via social media.

During a conference call with analysts early last month, Finish Line executives admitted that they had been overconfident in scheduling the new platform's go-live just before the holiday selling season kicked into high gear. However, they were also were critical of the technology's impact on the customer experience.

"We had consumer experience issues that were primarily driven by the site design and functionality," said Finish Line Brand president Samuel Sato. The problems went deeper than just the customer experience; responding to a question about whether performance issues were limited to front-end site design or included integration with back-end systems, Sato said both customer experience and conversion metrics were both "largely impacted by both site design as well as functionality of the back end."

Knowledgeable industry experts wondered why the retailer plunged in with its new platform without first performing multi-variant testing that would likely have revealed user experience issues and functional difficulties ahead of time.

Finish Line's plans for its e-commerce operations are not known at this point. The retailer returned to its legacy e-commerce platform in early December and CFO Edward Wilhelm reported "no lingering effect" on conversion or user experience. During the January 4 conference call, CEO Glenn Lyon said the retailer would make a decision about whether to re-launch the new site within the next 90 days, i.e. by early April 2013. The retailer's fiscal year ends March 2, 2013.

For related content: Diary of $3M Black Friday/Cyber Monday Loss

Finish Line E-Commerce Hiccup Cost Retailer $3M in Lost Sales

Finish Line Goes the Distance with Demandware Commerce