JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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The basic rule is the home page needs to load in 3 seconds, maximum. That’s down from 5 seconds three years ago, and 8 seconds in 2001, according to site performance experts. Most other key metrics ought to be measured every minute. The longest wait between measurements at the lowest end of the priority scale ought not to be more than 5 minutes.
Crutchfield Corp. measures site availability every 30 seconds and shopping cart and checkout every 1 to 5 minutes, depending on traffic. “Application response, site availability and page load time are three of our most important metrics that affect sales,” says Steve Weiskircher, senior director of information technology for Crutchfield. “We are very aggressive in measuring these.”
Retailers, however, have not always been as scientific. At the beginning of the decade, measuring frequencies and other benchmarks were set arbitrarily. That led to notably wrong assumptions. Despite the belief that the steady lowering of home page download speeds would significantly boost conversion rates, they only inched upward from 2% to 2.3% between 2001 and 2004 when the 3-second rule came into play, according to Geoff Galat, vice president of product strategy for TeaLeaf Technology Inc.
“Page speed is important, but its impact on conversion has not shown to be as great as some retailers think,” says Galat. “Retailers have to create performance benchmarks that allow them grow at the pace they want and that allow them to remain competitive against retailers offering similar merchandise. Benchmarks based on focus groups can still be pretty arbitrary.”
The best bet for retailers when setting realistic benchmarks is to weigh the level of service they want to provide against the resources they have available to make it a reality. “There is a cost to performance monitoring, but retailers can’t manage what they can’t measure,” says Bonny Brown, director of research for Keynote Systems Inc. “Retailers are better off leaving performance benchmarks to fact, rather than opinion.”
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