Target Outage Exposes Dark Underbelly of Retail Tech
It wasn’t a hack. No personal payment information was exposed. However, for a little more than two hours last weekend Target stores nationwide experienced a company-wide register outage that basically prevented the big box retailer from accepting customer payments at their checkout lanes. In a brief statement, Target explained that the outage was caused by “an internal technology issue.” Basically, someone hit the wrong button, flipped the wrong switch, plugged in a bad line of code, or something along those lines, which caused the company’s entire brick and mortar checkout system to go haywire.
A day later, and completely unrelated to the internal technology issue, Target saw its card processing system go offline for another hour and a half because of a problem their third-party vendor was having with their own system.
Target operates more than 1,800 retail locations that average a little more than $100k per day in revenue. So take all 1,800 stores offline for two hours on two separate days, and you can start to understand the financial ramifications of something like this.
Retail tech issues are inherently going to be more magnified—and exponentially worse—when we’re talking about big box operations like a Target. But what this situation does is offer retailers of all shapes and sizes an important reminder that they ought to ensure their own systems and third-party vendors are in a solid working condition.
“Nobody is immune to an outage like this,” Joanne Joliet, senior research director at Gartner Inc., told the Wall Street Journal in regards to the Target incident. What’s difficult about retail tech today though, she said, is the fact that even routine tech maintenance is difficult in today’s retail environment because all of these systems are so greatly intertwined.
With so much pressure on retailers to create these seamless experiences between their online ecommerce shops and their physical stores, the need for and reliance on these systems that so greatly integrate the online/offline shopping experience has skyrocketed. The benefits—things like one-day shipping, buy-online-pickup-in-store options, larger promotional events, and more—are certainly worth it and helping traditional retailers regain the edge they lost to massive ecommerce operations like Amazon. But it also puts them in a position where they need to ensure they’re taking the utmost care of their systems and regularly checking in with their technology partners.
For Target, four hours of lost sales at its stores can be made up with one strong weekend. The same may not be true for the local electronics shop around the corner that relies on every last customer interaction in order to make ends meet.