The 2013 holiday season will be here before we know it, and it's always a time for retailers to reflect on what worked - and what could have worked better - last year.
The 2012 holiday season was considered a letdown for many in-store retailers. Nationwide, retailers saw in-store sales between Oct. 30 and Dec. 24 grow by less than 1 percent compared with 2011, according to MasterCard Advisors' SpendingPulse report. That is considered the weakest growth since 2008, when the economy was in recession, and was attributed largely to Hurricane Sandy and "fiscal cliff" uncertainty.
In spite of this, retailers' online operations and online-only merchants rang in another stellar year. A report by Chase Holiday Pulse, a publication of credit card processor Chase Paymentech, estimated that national holiday online sales were up 15.2 percent over last season's. This follows a 16 percent increase from 2010, according to IHS Global Insight. For several years now, online sales have been emerging as a bright spot in the retail industry. It's no wonder many retailers will be focused on creating the richest, most satisfying and high-quality online experiences this holiday season.
For Customers, Instant Gratification is Key In the online realm, customers want to get in and out of virtual stores quickly. For the average user, 0.1 seconds is an instantaneous, acceptable response. As response times increase, dissatisfaction rises and the impact of a slowdown can be devastating. Amazon calculated that a one-second page load slowdown could cost it $1.6 billion in yearly sales. In addition, Google found that slowing search response times by just fourtenths of a second would reduce the number of searches by 8 million per day.
Consider another everyday scenario of what could happen when online retailers fail to deliver high-quality interactions. Drawn by a manufacturer's sale on electronics, an online customer tries to buy a new device. The website is slow, performs inconsistently and then actually locks. Not wanting to miss the price, the shopper phones a call center for help (a higher cost channel), but even it is jammed. The customer, originally intrigued by the sale, abandons the idea to buy.
Not only do customers want their interactions to be faster, but retail is one of the few industries where users also want their experiences to be richer, featuring functionality like online product tours, product catalogs, and ratings and reviews. These features can make Web pages "heavier," which is at odds with the goal of achieving speed.
Complexity in the Application Delivery Chain Delivering fast, reliable experiences has also been made more difficult due to increasing complexity in the application delivery chain. First, there's the data center. The growing use of multitier architectures, virtualization and other new technologies makes it difficult for IT to ensure optimal application reliability and speed. There are so many potential points of failure and so many interdependencies that trying to identify the root cause of an application performance problem can be like trying to find a needle in a haystack.
Second, there's the Internet, which is also making things much more complicated. Third-party components are assembled by the browser and can include functions like content delivery networks (CDNs), ad networks, video, news feeds, shopping carts and Web analytics. A slowdown for any one of these services can degrade performance for an entire Web page. Today, there is significant complexity that online retailers didn't have to deal with back when applications ran solely in data centers that they controlled. What's more, mobile is forcing retailers to ensure strong performances across a variety of carriers and devices, including smartphones and tablets. Greater desktop browser diversity only exacerbates the challenge.
Finally, it's not just the data center and the Web that are more complex. The cloud also impacts application performance. Cloud providers rate themselves on availability but that does not necessarily translate to high performance for your customers.
With so many points that can result in a sluggish or unreliable website or application, how can you ensure rapid application performance and reliability? The key is to adopt a new generation of application performance management (APM) centered on an understanding of the true end-user experience.
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Consider the case of a leading retailer using a new generation of APM to optimize the performance of business-critical, customer-facing applications across the most popular Web browsers and mobile devices. By monitoring the true enduser experience for all applications, 24/7, this retailer can be proactive instead of reactive. More specifically, the challenge this retailer faced was that the vast majority of their online ecommerce content was being served by CDNs, a necessary step to serving the 25 million daily requests. "Server-side only" solutions didn't highlight any performance problems end-users might experience due to a CDN or other thirdparty service. These solutions only monitored a very small subset of overall traffic that was actually delivered to the retailer's data centers. If there was a performance problem with a CDN, it would take hours until they received log files to start triaging the problem. At that point, the retailer could have already lost revenue or received complaints.
By moving from a "server-side only" solution to an end-user focused approach that sits in - and captures data from - real end-user browsers, this retailer has been able to monitor all their website traffic and lower problem resolution time from several hours to minutes. The retailer now has complete visibility across their application delivery chain, versus a "blind spot" to a huge percent of potential problem hot spots. By monitoring all applications, this retailer is also better able to quantify the business impact of application performance problems. Finally, as additional benefits, an end-user focused approach to APM allows the retailer to get a realistic sense of overall site visitor volume. The merchant can also gauge the most frequently visited landing pages, which is useful for evaluating the success of various marketing campaigns.
Reliable interactions are absolutely critical to an online retailer's success. So why are so many ecommerce businesses vulnerable in this area? The simple answer is, there are so many connection points and points of potential failure standing between the back-end of the data center and customers' browsers. Any one of these areas along the application delivery chain can experience problems and take customers from satisfactory experiences, to complete frustration.
As modern applications execute more code at the very edge of the Internet, retailers must have a granular view of this experience. Only a new generation of APM can overcome all of the complexity of modern application delivery chains and deliver this view. When combined with deep dive diagnostics spanning the complete application delivery chain, retailers can proactively identify, pinpoint and fix the source of application performance problems, before damage is done.