The Price Of Downtime: 5 Gotchas Facing E-Retailers

Shopping Season Tough For E-Retailers

As the holidays approach, that means shopping, and increasingly, online shopping. But a survey of 106 e-retail CIOs, CTOs and IT managers conducted by McLaughlin & Associates for Rackspace, shows that many companies still have a ways to go in order to optimize their shopping sites, as this sector lost hundreds of millions of dollars during the holidays last year due to website downtime.

Adrianna Bustamante, Rackspace's leader for e-commerce channel development, said Web hosting partners working with infrastructure providers like Rackspace can help e-retailers maintain functioning websites during the peak shopping season. "We want to make sure we're educating our partners so they can communicate with e-retailing customers, so they know what can happen and that we can be trusted advisors to help them," she said.

Continue on and see five issues facing e-retailers.

1. Downtime Adds Up For E-Retailers

Only 19 survey participants out of 106 answered a question asking how much revenue their business lost as a result of website downtime last year, but the results were startling.

More than 5 percent (5.2 percent) of the survey’s respondents said they lost more than $100 million, 6.2 percent said they lost $26 million to $50 million, 6.2 percent lost $11 million to $25 million, 19.2 percent said they lost $2 million to $5 million, 2.6 percent lost $500,000 to $1 million and 60.5 percent reported losing less than $500,000.

The survey did not divulge the names of participants, but last year, Target, Disney, H&M clothing store and many other businesses experienced major downtime. "How could this happen?" Bustamante asked. "It's very much about road testing and it’s hard to overcome the feeling that, 'We’ll be fine.'"

2. E-Retailers Need To Realize They Could Be Next

When it comes to holiday downtime, 18.3 percent of respondents said their websites experienced some downtime during the holiday season last year, with 81.7 percent saying their sites stayed up.

Bustamante said e-retailers and their technology partners need to be proactive and conduct testing in advance of the holiday rush. "Good dress rehearsals are important," she said.

3. E-Retailers Need To Zero In On Downtime

Despite the drastic losses last year and the high percentage of companies experiencing downtime, almost a quarter, 23.2 percent, of respondents are taking no action to eliminate or improve downtime for their websites before the holiday season.

Others are taking specific measures, with 37.4 percent of respondents load testing, 34.6 percent planning third-party hosting, 33.3 percent developing website redundancy, 30.1 percent hiring additional IT staff and 29.8 percent adding outside support.

4. E-Retailers Need To Spruce Up Their Websites

Many, but by no means all, e-retailers are optimizing their sites with different technology updates. The most popular measure is to bolster capacity to accommodate traffic bursts for key shopping days such as Black Friday, the day following Thanksgiving.

More than 18 percent of companies surveyed are taking no action to improve the shopping experience on their websites. But almost half of respondents, 47.9 percent, plan on increasing computing capacity, with 44.1 percent redesigning their websites, 43.6 percent ensuring security and 28.4 percent engaging in third-party hosting.

5. E-Retailers Need To Consider How Much They Stand To Lose

For motivation to take precautions against website downtime, e-retailers should consider how much they stand to lose in an outage.

When asked how much revenue their business could lose if their website was down for a day during the holiday season, 6.2 percent of respondents said more than $100 million, 3.2 percent said $51 million to $100 million, 3.4 percent said $11 million to $25 million, 5.7 percent said $6 million to $10 million, 19.2 percent said $2 million to $5 million, 25.9 percent said $500,000 to $1 million and 33.8 percent said less than $500,000.