BrazilOnline retailers must ensure IT systems can handle peak season
With Black Friday, Sinterklaas and Christmas on the horizon, retailers must make sure their systems can stand up to the demand of the busiest season for online shopping. Even a small system failure can have big impact on sales in the final weeks of the year. A discussion with Dion van der Arend from IDC Metri on how e-commerce platforms can best prepare for the coming traffic.
From November onwards, a string of major e-commerce events follow each other in quick succession. In the United States – and increasingly also in Europe – Black Friday and Cyber Monday see shoppers flock to make the most of deals on the latest good and gadgets. Close to home, in the Netherlands, the traditional Sinterklaas festivities see a further boom in gift-giving, with no let-up for e-commerce platforms until after the Christmas period.
Even after the 25th of December itself, in countries like the UK, Boxing Day sales drive further traffic – meaning the busy period can even continue until the New Year.
With the rate of inflation having finally slowed, digital sales figures are once again expected to break records in 2024. But only if the entire IT environment – apps, websites and supporting IT systems – is smooth and fully operational, according to Van der Arend, a leader at IDC Metri, an IT strategy advisory subsidiary of research group IDC.
“During peak shopping periods, systems are under unprecedented pressure,” Van der Arend explained. “A minute of downtime can cost thousands of euros in lost sales. Online retailers should therefore check in good time whether their IT environment can withstand high loads.”
With the impact of disruptions making such a major impact, Van der Arend recommended that retailers start to fortify their systems with an analysis of the traffic to be expected – and verifying what their current systems can handle. A forecast of expected traffic combined with internal data on system capacity can provide the necessary insight into the strengths to be built on, and weaknesses to bolster in a system.
Another method to test the resilience of systems is benchmarking. In this method, retailers compare their IT infrastructure with that of top performers in the industry on aspects such as capacity, speed, peak performance, user-friendliness and more.
“With these insights, retailers can map out their technical competitive position well.”
Balancing risks and rewards
Ultimately, prevention is always better than a cure, and as a result, Van der Arend urges companies to invest early to offset any disruptions ahead of the 2024 holiday season. After all, “missed turnover cannot simply be reversed” – as a customer who wants to buy a gift will probably just “shop elsewhere if they find your site is down.”
Another tip for retailers is to have a continuity plan in place for major IT disruptions caused by external actors. With valuable data flowing freely with every purchase, the risk of cyber attacks for e-commerce platforms is always present.
“Companies should stress test their systems, ensure that backup systems are ready to restore data, and have emergency teams ready for critical situations.”
Of course, all of this comes at a cost – and at a time when many companies are already weighing up inflated costs elsewhere in the business. In this case, e-commerce companies should always weigh up the investments in advance, against the financial risks that they could run if their systems are caught short between Black Friday and Christmas.
Van der Arend concluded, “Take a data-driven approach. Ensure optimal IT investments for maximum ROI and efficient use of resources.”
IDC Metri’s services
At IDC Metri, the firm offers a range of services that can help retailers navigate these challenges. “In the area of insights, we conduct benchmarking studies to assess IT performance and compare that with industry leaders, including on key performance indicators such as system capacity, speed, peak performance, and user-friendliness. Our team can rapidly turn those insights into tangible actions for mitigation and improvement.”
More geared at long term investments, IDC Metri can help retailers with the full lifecycle of supplier sourcing, from strategy through to tendering, contracting and the handover.
