business

The fix is looking a little loose for Target.com.

CEO Gregg Steinhafel recently assured investors that the Minneapolis-based retailer is smoothing out the kinks in Target.com after two embarrassing crashes following the site's August launch. Steinhafel said Target has added money and staff to improving the website, though the company declined to disclose specific steps.

"We feel confident we've got the right amount of resources ... to make those fixes, as well as the team members in place to make great progress going forward," Steinhafel said during a recent call with analysts.

Target is competing for online sales with major retailers like Wal-Mart, which have well-established websites. The financial stakes are high, too, with November and December accounting for as much as 80 percent of a retailer's annual online sales.

"Target is trying to play catch-up at a time when other retailers are in the next stage of their online strategies," said Carol Spieckerman, president of Newmarketbuilders, a management strategy consulting firm in Bentonville, Ark. "Target hasn't yet built out a foundation."

Unlike traditional bricks-and-mortar stores, online retail sales are enjoying strong growth. For the first nine months of this year, e-commerce sales have already totaled $111.8 billion, a nearly 13 percent jump from the same period a year ago.

Target generated approximately $1.3 billion in website sales in 2010, according to Internet Retailer. So any prolonged disruption with the company's website during the fourth quarter could cost it a significant chunk of revenue.

And heavy holiday Web traffic can trip up companies with significant e-commerce experience. On Monday, consumers trying to access Best Buy's Reward Zone early online sale faced long delays.

"We experienced an overwhelming response," to the sale, the company said in a statement. "Unfortunately, the unusually high volume slowed down the online shopping process for some of our customers. We have apologized to them for the inconvenience."

Best Buy, based in Richfield, said it offered extra reward points to affected customers.

More fashion chic than tech geek, Target had farmed out website operations to Amazon.com for about a decade. That changed this year when the retailer took control of Target.com, which sells an assortment of merchandise available only on the website.

Target flipped on the switch to its new website in late August. About two weeks later, the retailer debuted its Missoni line, a 400-piece collection of clothing and housewares, its largest exclusive launch to date. The items were so popular the site crashed and consumers later complained of credit card processing glitches and extensive shipping delays.

Then in October, the website went down again. Soon after, Target.com President Steve Eastman left the company "to pursue other opportunities." Some analysts say he was fired.

Experts say Target gave itself little time to fine-tune its website. Normally, businesses roll out their sites gradually, giving themselves wiggle room for hiccups and glitches, said Adam Roozen, a former top online executive for Sam's Club, the warehouse chain owned by Wal-Mart Stores Inc. When Roozen worked at Sam's Club, he said the company gradually rolled out its redesigned website in small increments.

Going into the holiday season, Target can't really "fix" its website, at least not in time for Black Friday or Cyber Monday, said Roozen, now CEO and founder of Echidna, a Minneapolis-based based Internet retail start-up. But Target should be in better position to manage its crashes and hiccups, he added.

Despite concerns over glitches, CEO Steinhafel stands behind the site -- and its fixes. In a move to shore up the site's operations and oversight, the company promoted Casey Carl to president of multichannel marketing this week, including responsibility for Target.com.

During his call with analysts last week, Steinhafel said Target has already made numerous improvements Target.com. "We've made a tremendous amount of fixes, as you can imagine, with a replatforming effort of this magnitude," Steinhafel said.

Roozen said the health of Target's website will be critical in the coming weeks. When there was a major crash at Sam's Club, the retailer initially lost about 15 to 20 percent of potential sales, Roozen said. The good news is that most customers eventually come back, especially if they are loyal to the brand, he said.

Spieckerman said Target's online operation speaks to its image. If Target wants to eventually become a major multichannel retailer, the company "has got to get its act together," she said.

"Otherwise, they're just a big old U.S. box" retailer, Spieckerman said.

Thomas Lee • 612-673-4113