Target's stock drops after weekend register meltdown
- Target shares are down more than 1% Monday.
- The big-box retailer got millions of dollars in negative media exposure following its nationwide cash register conundrum, Apex Marketing says.
- Target has since resolved the issues.
Target easily could have lost as much as $100 million in sales over the weekend when the big-box retailer's cash registers went down, according to one retail industry executive's estimate.
The average Target store has more than 20 cash registers and brings in roughly $40 million per year, or about $100,000 in sales per day, said Jonathan Treiber, CEO of RevTrax, a company that works with retailers to manage promotional offers.
"With a chain-wide outage for a full-day ... the revenue impact would be [a loss of] approximately $200 million," he said. "Even if some of those sales migrated online to a functional web store ... the sales hit was still easily nine-figures. And that estimate does not include any future loss in sales from customers abandoning the store completely and spending their money elsewhere."
To put these numbers in perspective, Target rang up more than $74 billion in sales last year. And its registers weren't down for a full day over the weekend.
But the incident was still weighing on Target shares come Monday, with the stock down nearly 2% at one point. More recently, shares were down less than 1%, as investors tried to gauge how much the retailer could have lost in revenues and store traffic.
On Saturday afternoon, for roughly two hours, Target cash registers across the country stopped working, preventing customers from making purchases in stores. Outraged customers took to Twitter and Instagram, sharing photos of them abandoning full shopping carts in aisles. The company later said the ruckus was the result of "an internal technology issue" and wasn't security-related.
Then, on Sunday, Target's payment processor NCR had technical issues at one of its data centers. As a result, Target again couldn't process credit-card payments at some stores for about 90 minutes. This wasn't related to the technical issues on Saturday, Target said. Both outages have since been resolved.
"It's awful. People are loading up for the summer, for camp ... it was a Saturday," Stacey Widlitz, president of consulting group SW Retail Advisors, said about the mishap. "But these things happen. Then guess what? Things go back to normal."
Target hasn't commented on the estimated financial impact of the outages. Online sales were still able to be processed this past weekend.
"We never want to disappoint any guests and we're working tirelessly to ensure these issues don't happen again," a spokesman said.
Ultimately, Widlitz said, "shoppers have a very short memory with things like that."
The situation would have been far worse in terms of negative impact if it had happened to a struggling retailer, "where you could easily walk across the mall to get the same stuff somewhere else," she said. Target's one-stop shopping destination is hard to match, she said. "Shoppers will creep back into [Target] stores."
Target's nationwide cash register meltdown created more than $16 million in buzz on the internet from news reports and other social media mentions, according to one marketing agency.
Apex Marketing found $8.9 million of Target's brand exposure over the weekend was negative, $6.1 million was neutral and $1.1 million was positive, totaling roughly $16.2 million overall. For comparison, on the prior weekend, Target received only about $435,000 in media exposure, Apex said.
Target shares, which have a market value of $44.5 billion, have rallied more than 30% this year.