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Peak trading: the rise of Black Fiveday and how retailers must respond

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Peak trading: the rise of Black Fiveday and how retailers must respond
Peak trading: the rise of Black Fiveday and how retailers must respond

John Beechen, Head of Managed Services, Salmon, examines ‘Black Fiveday’ and how retailers can take the stress out of their systems.

BLACK FRIDAY 2015 saw a tipping point in peak trading. In the UK, we witnessed our first £1 billion online shopping day. While 2014 saw chaos in high street stores, with customers fighting over the best deals, in 2015 high street stores were far calmer. Customers were prepared and ready to purchase their bargains online; our data showed conversion rates were up by 66% on the day. The growth of online trading was even more pronounced in the US where, for the first time, Black Friday online sales outstripped physical sales. What’s clear is that Black Friday is moving to become an online-first phenomenon.

However, there were still reports of some retailers facing website outages due to the high volumes of traffic. On some sites, customers sat in online waiting rooms before they could make purchases, or found that when they reached the site the products they wanted were unavailable. As 2016 promises even more of an emphasis on the online offering, retailers must begin to plan their approach to peak trading now to ensure that they can cope with these new levels of online demand.

This year we at Salmon are advising retailers to start preparing for five days of peak trading in November, from Thursday 24 November through to Cyber Monday on the 28th. We are hearing from retailers that they are planning to start discounting even ahead of the Thursday, although this is when traffic will really build. In 2016, we predict that there will be £5bn spent online in five days. This is because we’re seeing retailers increasingly prepared to spread out their deals over a longer time period, both to retain customer interest and to help systems to cope better with traffic. However, this will mean that retailers will be under pressure to ‘get it right’ across the whole week.

The stakes are high for retailers to deliver this year. Customer perceptions and relationships can be seriously damaged by poor experiences on Black Friday. Difficulty with slow load times and queuing on the website can cause real frustration, while poor fulfilment will create further annoyance. And this won’t only damage the view point of the consumer affected. Social media means that as soon as users become aware of a problem affecting a brand or retailer, negative reports can spread rapidly and even start to trend, regardless of how accurate or fair that criticism may be.

Moreover, media interest in Black Friday remains high. Two years ago in 2014, stories about difficulties with Black Friday dominated the headlines, ranging from fights in-store to website crashes. This meant that in 2015 the media were particularly alert to any issues with retailers, and were quick to pounce on issues like slow website loading times as evidence that a particular retailer had ‘failed’ Black Friday. As such, retailers should be all the more aware of the wider difficulties that technical failures on Black Friday may cause, and take enough time to prepare their online offering.

First of all, retailers must take the time to align marketing and operational planning. Black Friday has become an extremely congested retail period, with discounts from almost every vendor. Retailers will have the opportunity to spread their deals out over a longer period, to ease traffic pressures on the site and avoid overwhelming the consumer. Customers are also aware of these timeframes, delaying purchases until the sale period commences. Retailers will clearly want to capture their potential share of sales as early as possible to mitigate this delay but there is also the risk that starting the offers too soon will dilute the sale period. Ultimately, it will be important to understand what will work best for particular customers and plan discounts accordingly, alongside clear communications to consumers about the deals and timings to expect. But, at the same time, retailers should allow enough contingency and agility to be able to adapt quickly if the landscape requires it.

"In 2016, we predict that there will be £5bn spent online in five days."


TAKE THE STRESS OUT OF STRESS-TESTING

Retailers should absolutely begin their technical preparations now. Extended stress-testing is vital to identify and address potential areas of weakness on the site. In 2015, we saw that many IT teams focused their stress-testing on the front-end of sites, as the location of the customer’s interface with the brand. However, the back-ends that process the transactional data were often not tested to the same degree to assess the impact of heightened activity; as a result, some back-end systems faltered under heavy traffic. Sometimes this was caused by the fact that the systems process groups of transactions in batches at set schedules. These systems were not designed or tested to deal with sudden, extreme upturns in volumes. Both front and back end systems must be incorporated into stress-testing, which must be undertaken with adequate time to go before the peak period, so that retailers know where their “break” points are, rather than simply thinking that they know.

Stress-testing and advanced planning can help in preparing important contingency measures, which will shore up performance during peak. Content caching is an excellent option for times of high traffic. Non-transactional and personalised content such as product images and descriptions may be cached using content delivery networks (CDNs), taking load off the transactional servers at peak times.

Similarly, limiting functionality on the site during peak period is a beneficial approach during peak, as the focus shifts from functionality and shopping experience to performance. Kill switches may be introduced to enable non-essential elements to be turned off during periods of high activity. This ensures that external sites and services, for example, can’t negatively impact performance.

Queuing systems may also be a useful contingency; by limiting the peak load, these structures can help to avoid site crashes or slow down during periods of very high traffic. Some retailers make use of online waiting rooms, although in this case it is very important to communicate clearly with consumers so that they know what to expect.

As a general trend, many sites are being hosted on cloud-based platforms, which allow for elastic capacity. This can be beneficial during periods of peak demand, as businesses can increase their processing power and server space quickly and temporarily. However, this presents a potential area of weakness during times of extreme traffic levels. ‘As a service’ provisions are likely to be shared between many different businesses, making the services vulnerable to being flooded by requests and crashing.

This might have significant consequences – for example, if the cloud service is something critical such as payment processing, the retailer’s ability to accept payments from customers may be limited. Ultimately, customers will lay the blame for these issues squarely with the retailer. Contingency planning, then, is vital here, to help to identify what on-site ecommerce applications will do in the event of a service crashing, and what remedial steps may be planned.

Retailers absolutely must begin to plan for Black Friday now. Peak trading is a time when retailers can make excellent gains, but the stakes are high too. A poor online offering during Black Friday can seriously damage a retailer’s reputation, both in the media and with customers. Planning in advance and extensive stress testing will avoid any disasters and ensure the retailer is ready to take advantage of Black Fiveday.
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