The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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Some shoppers may be using newer versions or the same browser at work, which increases performance. Others may be using entirely different browsers at home than at work. “Retailers that don’t look at their site in every available browser and version of the browser are at risk of losing customers using a browser not compatible with their site,” Poepsel says.
Testing also applies to the inclusion of new applications on a web site or applications operated by an outsourcing partner. That is especially true for personalization applications targeted at repeat customers.
“If it takes three times longer to download the same page as a result of adding a personalization application, retailers need to examine whether adding the application is worth it,” Poepsel says. “Any time a new application is added it can adversely impact site performance and unexpectedly put off the shopper.”
The 4-second rule still holds
Once retailers settle on the appropriate metrics the next step is to determine whether the infrastructure can support them and the cost of tracking them internally. Infrastructure costs include the I.T. staff and the cost of the software to monitor performance among a host of total costs to be quantified. Other infrastructure issues to consider are scalability of the system and performance of the web site over a wide geographic area.
“The greater the distance between the server and the customer accessing the site through the server, the slower the performance of the site,” Bradley says. “Retailers may also invest in capacity that goes unused except for a few weeks a year or gamble they can get by without that investment only to have their site go down due to a spike in traffic.”
Akamai provides retailers with the infrastructure needed to support performance through its EdgePlatform, which is comprised of more than 36,000 servers in 70 countries within nearly 1,000 networks. Each server continually monitors site traffic, looks for trouble spots and assesses overall network conditions to ensure reliable performance for e-retailers.
“The rule for page downloads is four seconds or less or the shopper begins to abandon the site,” says Bradley. “The issue for retailers is: can they meet that standard during peak shopping times over a large or even global geography or do they need an outsourcing partner to do it?”
Offloading processing and monitoring capacity to a third party can generate substantial cost savings that can be applied to other areas of the retailer’s business and boost sales. “This is a factor that helps strengthen the business case for outsourcing,” says Bradley. “There is more to measuring the return on investment than cost savings and improved performance. Intangibles such as brand image can be damaged by a poor web experience.”
When selecting an outsourcing partner for site performance monitoring the first question retailers ought to ask is whether outsourcing allows the retailer to focus on its core competency.
The benefits of outsourcing
“The benefits of outsourcing are that outsourcing frees retailers to focus on what they do best, marketing and merchandising, and spares them the cost of having to invest and maintain a performance monitoring infrastructure and hire support staff,” Bradley says. “Those savings can be applied to the core business. These points are at the heart of the business case for outsourcing.”
The next step is to investigate the financial health of the prospective partner, the company’s record for satisfying clients, and whether the vendor has experience working with e-retailers of a similar size and that serve a similar customer base.
“It is important to have confidence in the vendor partner and to ask these types of questions because doing so can help the retailer determine their level of confidence,” says Freed. “It is also important to look at whether the vendor’s technology is evolving with the marketplace.”
One trend in the evolution of performance monitoring technology is partnering between vendors to support one another’s applications. “We partner with all clickstream providers,” adds Freed. “No one vendor can provide it all, so partnering is a way to get the tools needed to see the entire performance picture.”
ForeSee Results measures site performance and customer satisfaction through the use of surveys based on the methodology of the American Customer Satisfaction Index. The results of ForeSee’s surveys help retailers identify what’s driving customer satisfaction and what will have the greatest impact on behavior and financial performance, and benchmark performance against competitors’ sites.
Regardless of whether a retailer elects to outsource performance monitoring or do it in house, the retailer should review performance metrics at least once a year. “Performance measurements need to be constantly evaluated,” says Freed. “Customer expectations are always changing and the metrics must change accordingly.”
As e-retailers move into new mediums such as m-commerce they are struggling to find ways to deliver the same rich performance on a handheld device with a small screen that shoppers experience on their desktop or laptop computers. “The challenge is going to be for the shopper to make a seamless transition between delivery channels when it comes to the consistency of the shopping experience and performance of the web site,” Bradley says.
Less income = more selectivity
As the current economic slump deepens, site performance will play an even greater role in conversions. Consumers tend to have higher expectations of retailers and be less forgiving of a drop off in performance, regardless of the channel. Hence, they are more selective of where they spend their disposable income.
“Consumers pick where they shop more carefully in tough times, so retailers really need to focus their efforts more tightly when it comes to site performance, as opposed to tweaking everything,” says Freed. “In this economic climate, retailers need to make sure they are getting the most out of their investment in performance because their success is going to be based on what the consumer thinks of their performance and whether the site let them accomplish what they wanted.”
As retailers place a greater emphasis on pushing shoppers to their web sites not only will site performance determine their success, but it will allow little margin for error.