E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
There is always new technology beckoning to online retailers. But they must factor in how new features will affect site performance.
The latest technology is an ongoing temptation for online retailers seeking to keep customers engaged and to stay abreast, if not ahead, of competitors. But over time, the gradual addition of features and functions intended to improve the customer experience can have the opposite effect.
That`s what Coolibar, an online retailer of sun-protective apparel, discovered after testing site performance using the services of vendor Gomez Inc. Viewing the customer experience from outside its own firewalls after several rounds of development showed that some customers were abandoning checkout or product search because page loads were too slow. The culprit? The use of too many outside services was slowing response time.
Coolibar consolidated outside hosts, dropped analytics that slowed response time to capture data the retailer didn`t use, and changed site architecture to support multiple, simultaneous data streams to and from outside service providers. That cut in half the time needed for customers to complete a site search, as well as add a product to cart and check out, according to Alan Higley, vice president of marketing.
"It was paramount that we could monitor our most important web pages and transactions to ensure they performed properly for our customers," Higley says.
Monitoring provided the information for Coolibar to make the kind of decisions that face virtually all online retailers as they balance how new technology would improve sales or operations against its cost and impact on site performance. The equation changes frequently, with the season, the business cycle and competitive challenges. Smart marketers can respond more quickly to opportunities and challenges by having a process in place to decide what new features to add, which existing ones stay, and what goes.
While Coolibar got its wakeup call from performance testing, e-retailers can also avert potential issues early on, in the design process, before any new feature is added to the site.
In making development decisions regarding AmericanBlinds.com, for example, prioritizing what features get onto the site is most often a question of staff resources, according to Joel Levine, CEO. "We can buy bandwidth cheaply enough. But we have finite development staff and projects take a certain amount of time," he says.
Furthermore, he adds, each feature added must undergo extensive quality assurance testing-a labor-intensive exercise-to ensure that adding something new does not break something already in place. One example it caught before going live with a site change: an inadvertent alteration to coding that would have allowed shoppers to select an item but not place it in their cart. What`s emerged from the balancing act at American Blinds is a process in which every potential addition to the site is scrutinized in terms of its potential worth versus its cost in manpower or hardware.
Other e-retailers fold additional criteria into their development decisions, such as whether a proposed addition meets strategic goals. LivingProof.com is a beauty site that launched recently with a line of hair care products. With little budget yet for advertising, it depends on editorial coverage as well as a launch in Sephora stores to drive shoppers to the site to learn about the science behind the product, which is a key differentiator.
"Every decision we make about the site tries to balance whether it fits in the bucket of brand awareness and information, or in the e-commerce bucket," says Kate Alessi, vice president of digital marketing.
On occasion it`s stumbled on content and tools that support both. Examples include an interactive quiz that helps shoppers decide which products suit their hair type, and videos showing how to use the products. Alessi says the retailer developed both features as a way to provide information, then found the conversion rate tripled among site visitors that used them.
Going forward, she adds, Living Proof also will judge potential additions against a third, emerging strategic objective: the ability to spread virally to drive traffic back to the site.
But like AmericanBlinds.com, Living Proof doesn`t want any new feature to impair functionality already in place. The site already uses many services from outside vendors, including a shopping cart, a live chat application and WordPress for its blog. To avoid an integration pileup, it works with a single web developer, Allurent, which joins the retailer in reviewing proposed additions to the site to ensure they will raise no performance or development issues.
"Allurent has a really good understanding of our code base and our challenges," Alessi says.
One more filter Living Proof uses to approve or reject new features is the bandwidth they`ll consume.
"There have been instances where we wanted higher-quality videos or animation and we have had to compress those features," Alessi explains. "We sacrificed a little bit on the quality of the images, but the benefit of a faster loading time outweighs any small degradation we see."
Other sites also grapple with whether to trade faster site performance for bandwidth-consuming new features that grab customers` attention but slow things down. Best Kiteboarding LLC`s web site supports live chat, videos, multiple blogs, a flip-book catalog, forums, lots of high-resolution images, a 3-D photo gallery and four languages. Though the retailer uses a hosted shopping cart from vendor NetSuite Inc. to handle e-commerce, it`s decided to host other functions on a media server that it leases from a hosting company.
"NetSuite has been a great solution from an enterprise resource planning and web hosting perspective, but it`s more cost-effective for us to use an external server for large files like videos," says Troy Lawson, chief technology officer. The site pays about $3,500 a year for video file transfers on the media server; Lawson estimates the service would cost about $15,000 at NetSuite.
However, browser calls to the media server where the site`s videos reside are relayed to the server through the NetSuite platform, so the speed of those calls affects overall site performance and the consumer experience. Best Kiteboarding could gain slightly greater speed by upgrading from a shared server at NetSuite to one that`s dedicated. However, Lawson estimates that would increase the cost by tens of thousands of dollars annually, requiring a tripling or quadrupling of sales to justify the expense.