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 ...
The retailer steered through a huge surge in holiday sales on a new e-commerce platform.
On Cyber Monday, the big first Monday after Thanksgiving, the technology team of American Apparel Inc. chief information officer and e-commerce chief Stacey Shulman received an alert that the web server infrastructure supporting AmericanApparel.com was about to hit the maximum traffic load on the retailer’s brand new e-commerce site. At first, there were no real worries. The site, launched just before the holiday season on Oracle Corp.’s ATG Web Commerce platform, was designed to scale up quickly to meet spikes in customer demand, and Shulman’s team had a plan in place to quickly add four standby web servers—enough to handle the fourfold increase in traffic that the retailer of trendy apparel and accessories for young adults had expected, she says.
But with the new servers up and running within minutes, Shulman and her I.T. staff realized within a few more minutes that the four additional servers wouldn’t be enough. “We were inundated,” she says. “We had anticipated four times last year’s traffic on Cyber Monday, but ended up with 20 times the traffic.”
For the next four hours, Shulman and about 10 I.T. people worked simultaneously to add more servers. “It was not fun,” she says. “It was pretty much all hands on deck, everyone running as fast as they can to build as many servers as we can.”
But throughout Cyber Monday and other peak shopping days, Shulman says, the retailer’s new technology platform—which relies on Microsoft Corp.’s Hyper-V server technology as well as Oracle ATG Web Commerce—did what American Apparel had expected: provide the flexibility and scalability to handle sudden spikes in traffic and sales. “We never questioned Oracle’s ability to scale,” Shulman says. “Without it, we wouldn’t have made it through the last holiday season. Most certainly, we would have crashed.”
Since launching ATG Web Commerce last fall, American Apparel has recorded a 38% increase in online sales over the same period a year earlier, and December sales rose 59% over December 2011, Shulman says. On Cyber Monday and the following day, sales rose 125% year over year for the two days combined.
To handle the initial surge on Cyber Monday, American Apparel’s I.T. workers, with help from Walnut Creek, CA, systems integrator firm Object Edge, a member of the Oracle PartnerNetwork, scrambled to write software code to prepare additional web servers within Microsoft's Hyper-V cloud or Internet-based virtual server technology, which enables to clients to access available capacity from a large number of web servers. The availability of Hyper-V server capacity, combined with the ability of the ATG Web Commerce platform to handle additional traffic, saved the day on Cyber Monday, Shulman says.
Although some customers on Cyber Monday had to wait for full site functionality during the busiest periods, AmericanApparel.com remained up and running throughout the day, Shulman says. “Our servers were slow during a four-hour period on Cyber Monday, some customers weren’t happy, and we were not proud of that, but the good news is that we were able to react quickly to the additional demand and our site was never down.” The retailer also learned how to be better prepared for holiday season 2013, she adds. “Next time we’ll have more servers ready on standby, and our process to add them will be a lot faster,” she says.
American Apparel has long-term plans to continue rolling out Oracle and ATG technology. It currently uses the built-in Oracle site search feature, for example, but plans to eventually deploy Oracle’s more advanced Endeca system for faceted search and navigation.
With a large business in wholesaling apparel products to other merchants, American Apparel is planning to use the same ATG Web Commerce platform to launch a business-to-business site later this year. It also expects to work with Oracle and ATG technology to improve its e-commerce sites for some 20 foreign markets, and to build more cross-channel merchandising and promotions across its web and store channels.
American Apparel is No. 287 in the Internet Retailer Top 500.