Killing Innovation With the Traditional Approach: The Story of Best Buy’s GIFTAG

Innovation projects fail for many reasons but often times the reasons point back to a disconnect with the customer or within the company.  Sometimes the customers weren’t sufficiently ready to buy or use the new product or service.  Maybe they didn’t yet understand the benefits, they weren’t comfortable enough with the novelty, or maybe they lacked the infrastructure to take full advantage of the new product or service?  There are an equal number of examples where companies were unable to operationalize the new product or service and had to abandon it.  But sometimes new innovations fail because a company can’t get out of its own way.  The story of Best Buy and their development of the innovative gift registry platform GIFTAG is just one of those stories.

In 2008, Best Buy launched a universal gift registry call GIFTAG.  Knowing that most customers would want holiday or birthday gifts from more locations than just Best Buy the tool was designed to allow users to capture products from any site on the Internet and add it to their personal gift registry.

An internal Best Buy development team was able to use cloud based tools to create a new product both quickly and cheaply.  The challenge was that executives were skeptical that anything done so “quick and cheap” could also be a quality product.  During my years in information technology I would often see leaders stick with the “traditional” vendors or methods because they were too afraid of what would happen if they failed.  They feared that they might jeopardize their career if their initiative failed.

The following is a reprint of the story of GIFTAG from the individuals who were involved in building it.


The Failure of GIFTAG (for the cost of discovery)

GIFTAG Screen ImageIn the Spring/Summer of 2008, the iPhone was gaining steam but the smartphone revolution was in its infancy. Facebook was still on campus. The social web was still emerging. Internet Explorer was the most popular browser among all internet users worldwide – Safari and Firefox were dwarfed by comparison. Google Chrome did not exist yet.

During that time, Best Buy was in the midst of a great run. The company was profitable, flush with cash, and holding a dominant position in global retail. The halls were constantly filled with happy excited faces and the future looked bright.

Our group inside Best Buy was known as The Bistro. We were comprised mostly of contractors – designers, developers, and product people. Our work was a mix of experimental and enterprise-grade applications and data services. We were called upon by various entities within Best Buy to solve problems usually associated with marketing, user experience and digital product development.

The Bistro was often working on a few experimental ideas in parallel with funded project work.

One such experiment was in response to a challenge from Best Buy founder and former Board Chairman, Dick Schulze. He was on a mission. He was on a mission to launch a Best Buy gift registry. Best Buy had tried to start a registry in years past and failed. After holiday season 2007, Dick was committed to launching a gift registry before holiday season 2008.

In response to Mr. Schulze’s challenge, The Bistro conceived a modern registry that would contradict conventional wisdom. We would consider how the user wanted to shop as the first order of business.

At that time, the Target gift registry experience was an example of what good looked like. Customers could scan product in stores (with a scanner gun), add items to a list, and invite friends to buy items from the list by telling them of the registry. The list could be viewed and printed from kiosks in the store. It was a solid brick and mortar solution.

We imagined a registry that would work to help a user with the pre-shopping that they were doing online before making their store visit. We recognized that Best Buy shoppers were event based shoppers (i.e. holidays, birthdays, home remodeling). We knew those shoppers were also shopping several other retailers for the same event. For example, you will probably not purchase all your holiday gifts from Best Buy.

GIFTAG, a universal gift registry, was born in the Spring of 2008 and launched in the Fall (at DemoFall 2008). GIFTAG was comprised of several components. To the user, it was a web interface with accompanying browser plugins and bookmarklets for IE and Firefox. The backend application was converted to run on Google App Engine.

Our choice to use Google Cloud products for GIFTAG introduced a new advantage to The Bistro. We were now able to conceive, create and deploy a scalable working application prototype in the time it took other teams to order, receive and configure a server. Our speed to working code created a lot of disbelief in an organization that was accustomed to spending and $50k-$200k to have their on-site consultant run a “discovery” project. That discovery project would yield a seven figure development proposal and the need for hundreds of thousands of dollars in hosting and server administration.

We were building enterprise-grade, scalable applications for the cost of discovery.

In some ways, GIFTAG was a success. GIFTAG was never marketed or integrated with the user experience. It ran without an error or any significant downtime until 2012 when The Bistro turned it off. At the time, GIFTAG was fielding about 50,000 organic visits per month.

A confluence of factors contributed to GIFTAG’s glorious failure. It wasn’t a seven figure project so how could it possibly be good enough, powerful enough, durable enough, and secure enough? Aren’t customers going to shop at other retailers with it since it’s universal? How is it going to work if it’s not integrated at POS?

These questions and others were enough for the organization to set GIFTAG aside and pursue a more traditional project approach.

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