Holiday is the most exciting and important time in retail. It’s where all the preseason inventory planning, the ramp up in hiring of seasonal employees for stores and warehouses, the marketing events, and all the promotions come together to deliver up to 60 percent of the total year’s business for the industry. Over the last 18 months during the pandemic, we’ve seen seismic shifts in e-commerce adoption. And given current supply chain delays, it’s possible many of the products consumers want to buy won’t make it to physical stores, and will get diverted to retailer’s fulfillment centers for on-time delivery.
All of these unique events are creating the perfect storm for one of the largest e-commerce holiday shopping seasons in history. Historically e-commerce events like Black Friday, Cyber Monday, and Singles Day create tremendous spikes in the e-commerce business and this year we may see peaks beyond anything we’ve experienced in previous years.
And with the possibility of limited inventory due to supply chain constraints, we may see even higher spikes as consumers compete for the perfect gift at the best price before inventories run out. Some retailers are already kicking off their Black Friday events early to smooth out these anticipated spikes in the business.
These large spikes in business require e-commerce platforms to scale, remain stable, and allow tens of thousands of simultaneous shoppers and transactions to occur in just a matter of minutes as consumers want to take advantage of the best offers.
Retailers are hyper focused on ensuring their e-commerce sites perform well. This requires cloud technologies to allow e-commerce platforms to quickly scale as traffic and transactions peak. Just as marketers, merchants and stores are planning for these peaks, so too must technology teams. Here are the top 5 actions retailers should be focused to ensure a successful e-commerce holiday season:
- Traffic & load: Ensure your e-commerce platform can handle the traffic load that will be generated from your holiday offers. Many retailers email their entire customer files at once with their Black Friday offers, creating a tidal wave of traffic in a short amount of time. Ensuring your site can handle the traffic is crucial.
- Transactions: The bulk of failures in e-commerce often happen during the checkout process, as the platform “makes calls” to third party services such as tax and address verification. If these third-party services can’t handle the load, they can fail, stranding the customer in the checkout path, unable to complete their purchase.
- Call centers: The call center often feels the pain when something goes wrong on the e-commerce site. It’s crucial to have agents available with the right technology to diagnose e-commerce issues so they can be discovered quickly and resolved by IT. Other technologies such as chatbots can help humans scale to even more customers, so problems can get resolved even faster.
- Fulfillment: The fulfillment center must be ready to pick, pack, and ship the volume of orders that will come from the marketing events planned throughout the season. Often times, warehouses become the bottleneck, and retailers find themselves playing catch up to get orders out the door, or worse upgrade shipping at their own cost in order to get items to customers to meet their delivery promise. Since retailers can’t book revenue until packages ship, its crucial fulfilment centers can keep up with demand.
- Cyber security: Fraud prevention and identification technologies must be in place, as the holiday season sees a significant spike in fraudulent transactions. Technologies that can identify potential fraud quickly and route to humans who can investigate and resolve issues is important not only to reduce risk but also “clear” orders that aren’t fraudulent.
These top 5 actions when executed well, can ensure a positive customer experience and result in retailers reaching their revenue targets for the season. When executed poorly, revenue is at risk, as well as customer loyalty. And since holiday is often a time when new shoppers come to the e-commerce site, it’s an opportunity to retain new customers for the future.
British fashion and cosmetics e-commerce retailer ASOS, has been a long time Microsoft Azure customer. Here are a few take-aways from their experience:
- Cloud infrastructure: ASOS re-platformed their customer experience and e-commerce capabilities to an Azure-based micro service architecture, which has given them unprecedented ability to scale. They have also continued to re-platform their remaining legacy estate to Azure to ensure end-to-end performance.
- Testing, automation, and recovery: ASOS leverages workload models that describe and test how systems are expected to perform under peak load. A core part of this is ensuring the monitoring and alerting built into their services is appropriate and automated. They also strive to cope with system failures gracefully, much of which is also automated.
- Investments for the future: As ASOS plans for a record-setting season and into the future, they are investing heavily in expanding data science and machine learning capabilities, and have expanded their fulfillment capacity, to provide customers with better delivery propositions and product choice.
“As an e-commerce fashion business, the need to serve ever growing numbers of customers during the pandemic has meant our technology estate has needed to evolve too.”—ASOS
There is truly no other time of year when the stakes are this high. And given the shifts to e-commerce over the last 18 months, and supply chain pressures, this year may be ‘make-or-break’ for many retailers. Happy shopping!
To learn more about how Microsoft enables retail organizations to achieve more and help them meet their e-commerce goals, please visit our Microsoft Cloud for Retail website and Azure for Retail website.