The Devil's in the Details ... My RedEnvelope Saga

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RedEnvelope.com is an online gift site with a targeted merchandise selection, a memorable ad graphic and a great publicist. Unfortunately all that didn't help me when I shopped for Valentine's Day gifts.


On Feb. 4, I tried to finish my V-Day shopping: Wife, mom, mother-in-law and daughter were in my sights. Having read a glowing article about RedEnvelope.com in the Sunday New York Times Magazine and of their move into catalogs in DM News, I figured it would be a no-brainer.


If you didn't see the Jan. 23 Times Magazine, the 3400-word story was a semi-insiders' account of how the site developed, morphed and merchandized its way through last year's holiday season. Written by a former editor of Wired, the story focussed on 36-year-old CEO Hilary Billings, whose legendary skills as a merchant at Pottery Barn made her especially suitable to overhaul and rebrand a so-so site previously known as 911Gifts.com.


Emphasizing the mantra that "success lies in creating a memorable experience for the customer," the story romanced the site and image of a red envelope, an icon borrowed from Asian holiday tradition and prominently used in print and outdoor ads. The story also introduced Kristine Dang, 32, Vietnam-born director of merchandizing, who, my wife was convinced, understood her completely and instinctively and bought goods that she was most likely to fall in love with. Well-conditioned, my next move was obvious.


Upon arriving at RedEnvelope.com, I clicked on the Valentines Day icon and started scrolling through the merchandise. And while the chocolate body paint made me snicker, I quickly found and loaded up a cart full of flowers. Then I seized on a tin of heart-shaped sugar cookies for my 9-year old, figuring two dozen flaming red roses was a bit over the top even for dear old dad.


I clicked. I filled in the form. I typed in my AAdvantage Visa number to maximize my own reward from all this romantic behavior, and just as I was about to check out two things occurred.


I spied a button to talk to a customer service rep which coincided with an anxiety about my kid getting her V-day gift on the 7th rather than the 14th. Given the option to chat with a rep and put my anxieties to rest, I suspended the transaction, now worth north of $300, and waited for my live rep to appear, courtesy of FaceTime.net.


A small box popped up and I typed my question in it. Being new at live chat with reps, I didn't know what to do to transmit my message. After watching the by-product of my one-finger hunting and pecking for 45 seconds, I started searching for a "send" button. It didn't exist. Then drawing on my instinctive feel for all things cyber, I hit the return key, took a deep breath and was delighted when "Craig" appeared.


Before Craig replied, a little text appeared to tell me he "was typing". He greeted me warmly and ignored my question. I greeted him and retyped the question. Then I waited. And waited. Evidently Craig was handling one, two or three other customers simultaneously. Or in this case, not-so-simultaneously. After two minutes I typed "Yo Craig ... are you still with me?" This prompted an apology and the answer I feared.


Evidently RedEnvelope could not or would not take an advance order, except for V-Day flowers. If I bought my kid the cookies, she'd get them in 3 days, unless I paid extra for overnight shipping, in which case she'd get them even earlier. I told "Craig" that this didn't make much sense. And I reminded him that the Times said that the site controlled its own "inventory, merchandising, marketing, systems management and customer service" infrastructure.


Craig either played, or was, dumb. He repeated the "no", emphasized the policy and offered me no empathy. He suggested I come back and make the cookies a separate order on the 10th. When I explained that I was shopping early and didn't want to come back to make a second order, he didn't or wouldn't grasp what my problem was. Confused and getting angry, I explained that I had $300+ in my cart ready to go and that this could be a deal breaker. Craig couldn't care less. He robotically repeated the policy and told me to come back in a week.


So I bagged the FaceTime.net session and the cart full of stuff and RedEnvelope.com. As Hilary and Kristine know, I'm a high-income, well-educated professional with a history of buying online. I'm not a price shopper and I have a very low tolerance for online idiocy. True to the target profile; I came. I saw. I was outta there.


So let's do the math. I spent 6.5 minutes online and was prepared to spend more than $300. I was dissuaded from my purchase by a CSR whose cost was incremental to the cost of goods, the cost of maintaining the site and the cost of advertising or public relations that got me to the site. Is it any wonder that RedEnvelope.com reported spending four dollars in marketing for each dollar of sales? In my case, they spent 1,200 marketing dollars to earn negative 300 merchandise dollars and whatever down stream negative word of mouth I generate. This is a rotten deal by anybody's calculation.


The lessons are simple. Details matter. Logical thinking from the perspective of your customers is critical. Shoppers do not suspend their insistence on convenience, shipping and personalization because they are online. In fact, these needs are heightened by the promise implicit in the technology. If you cannot deliver on them, don't spend the money to get me there and then annoy me.
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