How can a small business compete with the internet retail giants out there? Large E-Commerce companies have money to spend on advertising, and they can afford to take a hit on margins in order to aggressively compete on price. However, as Moonpig demonstrated on Mother's Day 2016, internet giants are also incredibly vulnerable when things go wrong, which can potentially work to a small business's advantage.
In 2016, Moonpig decided to use their brand strength and advertising clout to aggressively go after the Mother's Day market – promising Mother's Day (Sunday) deliveries for orders placed right up until 4pm the day before. Moonpig had clearly made special arrangements with flower and courier companies to ensure they could deliver on their promises.
Unfortunately, Moonpig was badly let down.
As Mother's Day got underway, a trickle of complaints on social media soon became a flood of irate customers describing flowers dumped in gardens and posting pictures of smashed vases and damaged flowers onto twitter. The complaints carried on into the next day when the national press picked up on it and reported it throughout the day on Monday.
It was a PR disaster for Moonpig. They were still in damage limitation mode for a week after Mother's Day, promising full refunds and dealing with very unhappy customers on their social media platforms. Not only did they lose the business of the people directly affected, but would you want to ever entrust something as important as Mother's Day flowers to a company that got things this badly wrong?
It is stories like this that can make any business ownder wake up in a cold sweat, but are there any lessons to learn from Moonpig's misfortune?
One clear lesson is the danger of over promising and under delivering. If you are making promises about delivery times then you must be able to consistently fulfil those promises – especially with something as emotive as flowers and gifts. Moonpig were clearly victims of their own success, with too many orders to fulfil and not enough time to do it; their late order deadline meaning they had no time to organise the additional resources they badly needed. Small businesses, by way of contrast, have a much closer relationship with the fulfilment process, and much less likely to be caught out with massive spikes in demand - they know how long fulfilment will take, and can confidently make promises to their customers.
Another lesson is seeing how fast bad news spreads via social media. Having such a huge customer base meant that when something terrible like Mother's Day happened, Moonpig were quickly overwhelmed by negative social media activity, with not enough experienced staff to deal with the complaints. Small businesses have a much closer relationship with their customers, which means the occasional complaint or mistake can be dealt with speedily and personally, defusing any potential bad publicity very quickly.
The moral of the story is that problems are always going to happen, and things are going to go wrong in ways that you cannot forsee or control. When things go wrong for internet giants, they go disastrously wrong in a public way. This means smaller retailers can move in, take the business from the internet giants, confidently set expectations about delivery and give the customers a much better experience.