Dec 7, 2010

‘Tis the Season for Online Shopping


It’s that time of the year again – wintery weather, too much food, and holiday wish lists filled with iPads, Kindles, and more. According to analyst firm Forrester, this year people will make more than 1/4 of their dollars from holiday purchases from the comfort of their Internet connection – with online sales in the U.S. reaching $52 billion – a growth rate of 16%, double that of 2009.

The strength of the online retail channel is a good sign to me that consumers are steadily overcoming one of the strongest initial roadblocks to online shopping – concerns about Internet privacy and security.

But, new challenges are quickly presenting themselves. The general surge in online holiday shoppers – as well as traffic bursts and “flash crowds” in response to discount deals and demand for the latest products (think Microsoft Kinect and Apple iPad) – are causing massive demands and dynamic stress on website infrastructure.

And as the holiday shopping period widens – with Black Friday and Cyber Monday losing relevance as “the only” peak shopping days – retailers are experiencing these increased demands for a much longer period of time.

To maximize customer transactions and ensure the best user experience during these new “cyber months” – over the holidays and throughout the year – retailers need to get serious about optimizing website performance and availability. Consider that for an online retailer, a 1-second delay in website performance means a 7% reduction in customer conversion, lost revenue and dissatisfied customers. Customers won’t – and don’t need to – tolerate a retail website that’s temporarily unavailable or where a purchase “times out” before completion, leaving them to wonder if the purchase actually went through. Unlike brick-and-mortar shoppers who have to drive around to comparison shop, online shoppers will simply click over to a competing retailer.

Retailers know that Internet shopping is here to stay. Today, they are statically sizing infrastructure to meet traffic bursts. But moving forward, I think more of the industry will move toward “elastic” capacity models using cloud services that provide the flexibility to more effectively meet and align capacity demands with seasonal peaks and valleys.

How have your holiday shopping habits evolved? Ever had an online shopping disaster? What changes would you like to see retailers make that would improve your online shopping experience? For retailers, what changes are you making to your websites – and infrastructure – to adapt to this shift?


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