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Target took hit with IT glitches, but unclear how large

Jackie Crosby, Star Tribune (Minneapolis) on

Published in Business News

It's never good news when your company's trending hashtag is #TargetApocalypse.

In an era of social media whiplash and cutthroat competition from Amazon, Walmart and other mass merchandisers, Target Corp. took a hit to its image -- and bottom line -- after a difficult weekend in which it ran afoul of technical glitches two days in a row. Whether the impact will be lasting, experts say, depends on what happens next.

"Apocalypse? It wasn't quite that, but it still ain't good," said Robert Passikoff, founder of a New York brand loyalty research firm Brand Keys. "As the differentiation between retailers gets slimmer and slimmer, the expectations get higher and higher and it gets more dangerous to make a mistake."

On Saturday, cash registers at all 1,850 Target stores went down in the early afternoon for about two hours, leading to long lines and a social media firestorm. On Sunday, some stores were unable to process credit card payments for about 90 minutes.

The Minneapolis-based company said Monday it was experiencing no new issues, and reiterated its ongoing work to resolve the problems.

"We know many guests had a frustrating shopping experience in our stores this weekend," Target said in a statement. "For that, we are truly sorry. We never want to disappoint any guests and we're working tirelessly to ensure these issues don't happen again."

 

Akshay Rao, a marketing professor in the University of Minnesota's Carlson School of Management, said the relationship between customers and businesses "is one of trust." And it's a tenuous balance.

"If I shop Target 100 times a year, the one time something doesn't work is going to stand out," Rao said. "Negative information is far more available and impactful than positive information."

Target took to social media and news outlets on Saturday and again on Sunday to explain that the problems were unrelated.

Saturday's issue was "an internal technical issue," Target said, while Sunday's intermittent problems arose from an issue with NCR, a vendor that processes its payments. Neither problem was the result of a security breach, the retailer said, and customers' private data was not compromised.

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