When Email Snafus Happen to Good Companies

Say it ain't so! I was actually sad when I read in MarketWatch this week that Seattle-based online retailer Zulily’s shares plunged more than 21 percent after it presented a weaker-than-expected sales forecast.

Not Zulily! Not the offbeat, quirky, flash-sales website that caters to mothers with products like clothing, toys and home décor for themselves and their children. Not the site whose customers, in a recent Zulily survey, chose Neil Patrick Harris and his brood as the celebrity family they would most want to join trick or treating! And not the site where I bought my daughter Caroline her first pair of “funky” patterned tights when she was three years old (she's 11 now)!

But it was true — despite the fact that Zulily’s third quarter 2014 net sales increased 72 percent year-over-year; active customers grew to 4.5 million; total orders placed increased to 5.9 million; and net sales are expected to be between $391.3 million and $416.3 million in the next quarter.

So, what caused the hiccup? Some analysts attributed the disappointing sales outlook to Zulily’s need to maintain its reputation as a provider of premium-branded merchandise at a time when retailers often slash prices or cut deals in hopes of attracting bigger-volume sales in the busy fourth-quarter holiday period.

According to a recent GeekWire article, the lower sales forecast was in part due to the fact that Zulily couldn't send out its daily email blasts to some of its customers this quarter due to issues with its email provider. This is a big problem, as you can imagine, for a flash-sale site that depends almost entirely on email to generate sales.

In a conference call with analysts, according to the GeekWire article, Zulily Chairman Mark Vadon said one of the larger email providers changed some settings, which meant “a lot of our emails weren't being delivered for a period of time.