E-commerce demand often peaks around Christmas. Its traditions about giving to friends and family offers it the inertia to become perhaps the biggest retail event in the UK. Retailers are constantly looking for new ways to increase their sales, and so it makes commercial sense to jump on Santa’s sleigh at a time when large swathes of consumers are most likely to spend their hard-earned money. They can also take advantage of the increasing trend to buy presents online, allowing retailers an opportunity to begin a longer term customer relationship with their shoppers by using the big data they glean from each and every transaction to offer customers the latest deals on Boxing Day or when it’s the turn of another special occasion to entice people to buy presents for themselves and those they hold dear.
Sales figures from the Office of National Statistics (ONS) and the Interactive Media in Retail Group (IMG) shows that online sales grew significantly ahead of Christmas in October 2016. The ONS reports that online sales grew by 26.5 per cent during that month, and the IMRG-Capgemini eRetail Sales Index was spurred on, growing by 19.9 per cent. The ONS reports that e-commerce sales now equate to £1bn a week – accounting for 15.2 per cent of all retail spending.
Upmarket fashion brand Ted Baker even reported a 30.3 per cent total in sales growth when currency fluctuations aren’t considered. Without them, the retailer’s growth still stood at a healthy 25.9 per cent and were helped by the firm’s international expansion. This success has been achieved by the retailer in spite of having to cope with some challenging trading conditions, and yet retailers have been able to boost their sales with thanks to cooler temperatures in October 2016. This spurred people on to buy clothes for the colder winter months, Halloween, and the US import of Black Friday.
Consumers are researching ahead of many of these major retailer events, and so their online e-commerce activities offer an opportunity to capture consumer data ahead of time in order to target their marketing campaigns. Yet some industry commentators suggest that retailers aren’t still making the most of the m-commerce, which is a mistake because an increasing number of consumers are using their smartphones to do their Christmas shopping. Research and digital analytics company Catchpoint, for example, has found that 47 per cent of all respondents of all ages use their smartphones to shop, and 29 per cent of them said they intend to do more online shopping through their mobiles.
In order to capture e-commerce and m-commerce customers, Eric Savitz discussed ‘Why Big Data Is all Retailers Want for Christmas’ in his 12th December 2016 article for Forbes magazine. Ahead of Black Friday he wrote: “As retailers settle in for…their biggest selling season of the year, the use of big data has become a critical force in growing sales [because] big data is helping retailers to stay in front of a new breed of consumer, the omni-channel consumer, and the avalanche of data they are generating.” So if they were to write to Santa for their own gift, retailers would only want big data for Christmas.
David Trossell, CEO and CTO of data acceleration company Bridgeworks explains: “There is the old adage that unless you have got it on the shelves you can’t sell it, and so the worst fear of any retailer coming up to Christmas is about whether he has got the right stock and has he got too much or too little stock.” He adds: “As we know with the internet, brand loyalty is only a click away, and so the retail industry has made massive leaps over the past few years on analysis big data, scraping conversations off social media to understand what is trending and what your opposition is doing.” He believes that retailers ignore these tools at their peril.
Yet site outages can occur, and Small Business magazine reports that online fraud is due to grow this Christmas. Owen Gough wrote in his November 2016 article for the publication, ‘Online fraud attempts expected to rise this Christmas’: “According to research by global payments company ACI Worldwide, e-commerce retailers in Europe can expect an 11 per cent rise in fraudulent activity during the upcoming Christmas shopping season, compared to the same period last year. The predictions are based on an analysis of hundreds of millions of transactions from European online retailers.”
Gough also cites Julia Roberts, payments risk manager EMEA, ACI Worldwide who commented: “A well planned and thought out fraud management strategy can increase revenue by as much as 20 per cent, and we encourage retailers to make adjustments to their online fraud monitoring and prevention strategy in order to provide customers with a seamless shopping experience during this busy season.” Yet having a fraud management plan isn’t enough as fraudulent transactions aren’t the only threat that retailers will face during the Christmas period.
Spikes in demand can slow down websites and cause outages unless the right business continuity plans are put into place to manage the increases in demand. Even large e-commerce firms like Amazon have suffered outages, and to date it’s happened to the firm three times. Each outage will undoubtedly lead to a loss in sales revenue, and Business Matters cited some “new research” which said that an outage could cost small companies up to £100,000.
These outages can be caused by a number of issues, and slow networks can make e-commerce and m-commerce sites hard to access. This issue will also cause shoppers to drift off to a retailer’s competitors if their shopping experience is crippled by network latency. Network latency is a bit like Santa trying to get down someone’s narrow chimney without having prepared himself by going on a crash diet during the months ahead of Christmas.
Trossell adds: “We all have to live with latency but we don’t have to let it steal all our performance when transferring data over distances – this is true for moving data to and from the cloud as it is having the freshest data at our disaster recovery site.” He then asks: “How much of an effect can this be?” In response to his own questions he says: “Well if you are using a 1Gb pipe with 30ms of latency you will be lucky to realise 20 per cent of your possible bandwidth.”
Santa also needs to invest in ways to secure his sack to ensure that each person’s present doesn’t fall out. By securing his sack he can ensure that each child is happy, and his brand will be safe for another year. That present could also be seen as the data that each created by each and every retail transaction from a PC, table computer, smart TV, smart watch or smartphone. So as wise person Santa should be both securing his data sack and use the big data his customers to allow himself the opportunity of securing long term customer relationships and to enable him to predict future demand.
Trossell explains why big data is so invaluable and why it needs to be secured: “All this data is highly valuable and all the data from last year is just as valuable. It is also the time when everything is working its maximum. It is at such times as these that some of the day-to-day tasks are pushed into the background as everyone is trying to update the website, fighting fire etc. It is exactly this time that disaster recovery and back up are key. If the worst does happen, you need the freshest data available for recovery. Moving this data off site securely and efficiently is paramount.”
He says that data acceleration with tools such as PORTRockIT rather than traditional WAN optimisation can also improve the ability of retailers, or even Santa, to analyse big data in real-time. Latency can lead to inaccurate sales forecasts and poor strategic planning. By mitigating it, the data will be fresher and more accurate, enabling retailers to act upon trends as they occur.
Top five data sack tips
Trossell therefore offers five top tips to secure Santa’s data sack during the festive season: Firstly, help Santa to deliver during the Christmas season by investing solutions that accelerate data while mitigating data and network latency. Secondly, ensure that your big data and e-commerce sites are backed up at a disaster recovery site that is located outside of the same circles of disruption in which other disaster recovery sites sit.
Thirdly, don’t react but act by thinking and planning ahead for all kinds of security and risk scenarios – including hacking and fraud prevention to protect your customers and your business. Fourthly, remember that upping your bandwidth or deploying traditional WAN optimisation techniques won’t accelerate your big data. So this leave the fifth tip, which has to be about looking around the market for solutions that will address latency and enable sales growth. After all, Santa wants us all to have a very happy Christmas and he is very keen to ensure that everyone’s Christmas orders arrive safely and on time. It’s in his interest to invest in securing his data sack, and retailers should follow suit.
Graham Jarvis, freelance business and technology journalist
Image source: Shutterstock/alexskopje