RealTime IT News

The Highs And Lows of Holiday e-Commerce

You've got to take the good with the bad, as the saying goes. How true those words ring for many online retailers taking stock of their performance on Black Friday.

Online retailers saw traffic jump 10 percent the day after Thanksgiving, compared with the same day last year, according to research from Nielsen Online. However, that surge in online shopping activity overwhelmed many leading retailers' sites, creating significant slowdowns that may have caused shoppers to lose patience and click away during a product search or checkout, according to Keynote Systems, a research firm that measures Web site performance.

Given the predictable increase in online shopping on Black Friday, Keynote says that moderate slowdowns (in the 5 percent to 10 percent range) can be expected, and are likely to have little effect on the typical consumer's experience.

"The average site's slow-down is almost imperceptible to the consumer with high-speed access," Keynote's study found. "However, those sites that experience significant slowdown usually will have problems with their product search, product information and checkout processes."

If anything, this year should have dealt a softer blow to e-commerce sites, with the increase in traffic this Black Friday down slightly from last year's 12 percent increase over the previous year, according to Nielsen.

Of the 30 major retail sites Keynote tracked, 10 experienced significant slowdowns in product search and checkout, including Lowes and Buy.com.

The sites that experienced the most trouble saw site performance slow by as much as 400 percent, Keynote found. However, no major site suffered a total outage, unlike last year when many went completely dark.

Though Keynote warns that significant slowdowns in retailers' sites "presumably will impact online sales," Nielsen's findings indicate that consumers are generally responding favorably to online promotions, which on the whole can be expected to improve the balance sheets of most retailers.

InterActiveCorp was the most popular retail destination on Friday with 5.3 million unique visitors, Nielsen reported. Amazon was second, with 5.1 million unique visitors, followed by Wal-Mart.com, with 3.6 million unique visitors.

Consumer electronics saw the strongest week-over-week growth, with Best Buy and Circuit City posting respective increases in unique visitors of 292 percent and 257 percent on Black Friday compared with the previous Friday.

Keynote does not provide real numbers to quantify the effect that poor site performance had on online retailers' sales on Friday. In a statement, the firm's Shawn White credits most retailers with "planning in advance for the online holiday shopping season, building site capacity and testing load and performance months and months before the season. That's paid off for most retailers, but a surprising number still have a ways to go."

What does this mean for Cyber Monday? Retail industry association Shop.org is expecting 72 million consumers to shop online today, either from home or work. That's an 18.6 percent increase over the same day last year, when 60.7 million consumers shopped online. Shop.org's 2006 figure was up just 2.8 percent from the previous year.

This means that while Nielsen's measure of the increase in online Black Friday traffic was down slightly from last year, Shop.org is predicting that Cyber Monday will see a double-digit increase. Are retailers ready?