Bizdom U 2009: Andrew Hwang

According to the Detroit Free Press, Meijer, a $13.2 billion dollar privately owned retailer, had an accidental incident last Saturday with their 179 Midwestern stores. Due to a glitch in the computer system from 10pm-11pm, all items were scanned at a 50% reduction when in fact the sale was only intended for a specific line of oriental rugs.  This small error turned out to be quite substantial considering that the retail giant produces approximately $1.5 million dollars in sales per hour, which translates to a loss of $750,000. Fortunately, the technical team at the corporate headquarters in Grand Rapids was able to quickly resolve the situation. The company spokeswoman, Stacie Behler, stated, “We became aware of it pretty quickly…We had lots of folks working on the problem, and within the hour it was fixed.” Furthermore, the company refused to take back any that their customers were offering to pay after they had noticed the error in their receipts. “It was our error, and there’s nothing that we would require or expect back from our customers,” Behler said.

The Meijer incident is an interesting story not because a few thousand people got lucky with a 50% discount, but because the issue was quickly taken care of. It would be hard to say that any large publicly owned company could easily have done the same- this is the advantage that privately owned companies have. They have the ability to make quick decisions with out having to worry about their shareholders or what Wall Street will have to say about their decision the next morning. This gives private companies more flexibility in terms of how they want to grow their business.

Another relevant example quick decision making within privately owned companies is Quicken Loans. I mention this company only because I am familiar with it due to Bizdom U’s affiliation with the Quicken family. Similar to Meijer, Quicken Loans has the ability to make big decisions without having to face the scrutiny of the media or bureaucratic investors. Within the company, there are no problems with simply getting things done whether there are technical issues or problems with the vending machines.

Behler’s final comments to the Grand Rapids Press was this: “This error actually gives us an opportunity to look back at the system and improve it.” There is no doubt that the mega retailer will have any problems preventing the situation from happening again.