Thursday, 9 December 2010

Queues, psychology, and collapsing websites

One of the problems of queues which involve people is to forecast when and at what rate the customers will arrive. Recently, the UK supermarket giant, Tesco, made a spectacular mistake in the run up to the Christmas rush and the holidays. Here's the story:
The Tesco Big Christmas Exchange
Back in November 2010, Tesco announced it was launching a Big Clubcard Voucher Exchange. Lasting four weeks, it gave collectors of Clubcard points the opportunity to double the value of their vouchers on a large range of non-food items, ranging from wine and computers to Christmas decorations.

A similar scheme was launched earlier in the year. However, Tesco trumpeted the fact that this time the scheme had been revamped, so now customers would be able to exchange their vouchers online.

But it went wrong

The scheme was launched around the time that most customers received their November points statement, early in November. If you wanted to double up your vouchers, the closing date was Sunday 5 December.

Clearly Tesco expected the bulk of interested shoppers to take part once they got their statement through, rather than leave it to the last minute. This was very much a mistake, as news reports and Internet message boards are awash with tales of shoppers facing enormous queues to exchange their vouchers, only to give up and try and do it online. With predictable results, the Tesco website collapsed under the weight of so many users.
Yes, it was bad understanding of psychology, leading to not enough provision of servers for the customers. There is a great deal of literature about call centres and the behaviour of customers, so someone should have been aware of the likely rush at the end. And, I suspect, there should have been some monitoring of the rate of redemption of the vouchers, which might have given advance warning of the changing rate of redemption. If only 10% of the customers redeemed their points in the first half of the offer, then it might be foreseen that there would be a great demand in the second half.

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