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E-com tech tough enough?
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November 19, 1999: 3:37 p.m. ET
Sites prepare early this season to avoid last year's glitches
By Staff Writer Michele Masterson
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NEW YORK (CNNfn) - It's every retailer's worst nightmare: a frozen screen and a message telling e-shoppers the site is "experiencing technical problems."
Behind the scenes, it could mean there are too many people on the site in general, or too many trying to buy the same product at the same time, or not enough servers or not enough capacity.
The bottom line is lost revenue: Customers give up and go elsewhere for the same product, even if the cost if higher.
"Online shoppers have made it clear that they expect much more than a flashy Web site and a novel marketing idea this Christmas," said Ken Seiff, CEO of Bluefly.com, a designer fashion and furniture e-commerce site. "They expect great selection, full service and prompt delivery in a convenient and professional manner. In our view, the winners in the e-commerce sector will be the companies that can deliver on these expectations."
Forewarned is forearmed
Taking a lesson from the frenzy of last year's holidays, Internet merchants realized they were woefully unprepared. Several big name sites reported outages, including Web bookseller barnesandnoble.com, owned by Barnes & Noble (BKS) and Bertelsmann, the German media conglomerate. Already this year, Toysrus.com has been deluged by online toy buyers, at times bringing the site down.
Considering that sales online are expected to jump as high as $16 billion this holiday season, from $3.5 billion last year, Web retailers have gone to great pains to ensure that when you buy a present for Uncle Fred, the order will be processed quickly and the gift will get to North Dakota, and not the North Pole.
Frozen screen mean lost dollars
Site downtime means lost sales and even worse -- shoppers who leave for another site and don't come back.
"It's a big impact on the rest of the year, too," said David Schatsky of Internet research firm Jupiter Communications (JPTR). "Customers may go to a competitor's site and never come back."
Zona Research believes that $4.35 billion a year in e-commerce sales may be lost due to slow download time. "The losses could significantly impact the future of e-commerce if online consumers become so frustrated they revert to shopping at traditional bricks-and-mortar stores and decide not to purchase online," said Jack Staff, director and chief economist at Zona.
In early November, the Toysrus (TOY) Web site experienced a huge surge in traffic, driven by its Big Book catalog, which promised savings and free shipping and was heavily advertised around the country. As a result, the site got hit with 10 times the traffic it had the previous week. The company said the good news was that it garnered a record number of orders and sales. The bad news was that the site was so besieged it was inoperable at times.
In response to the outage, the company posted a notice online that read: "Due to the overwhelming popularity of the Big Book of savings, we had to limit the number of guests to our Web site. Please accept our apologies and try again later."
"We were astounded at the multiple increase in orders; they're beyond our most optimistic forecasts," said CEO John Barbour. "As a result of the huge demand, Toysrus.com will be tripling the number of servers through this week to prepare for the holiday onslaught. We're sorry for any inconvenience to the many shoppers who were unable to take advantage of these special promotions."
The company said it had tried to prepare for the anticipated spike in traffic and quadrupled its servers, yet it was still overwhelmed. A Toysrus.com spokeswoman said the company is continuing to upgrade the site's infrastructure, but would not specify what measures are being taken. She said there were few customer calls complaining about the outages and that it pointed to the customer's brand loyalty.
However, a more likely scenario is that shut-out clickers gave up and went to rivals such as eToys, KB Toys or Amazon's toy site, analysts said.
"It's naivete on their part; they're kidding themselves," said Alexis Gutzman, an e-commerce consultant and founder of Over the Web. "If they think their prices are so great, then they should have received a million complaints. People probably just went elsewhere."
As Bill Bass, Lands' End (LE) vice president of e-commerce, put it, "You can't ever let your marketing department write a check your back-end can't cash."
In January 1999, immediately following last year's holidays, Jupiter conducted a survey of 2,100 online shoppers who were polled about their feelings regarding static screens. While 51 percent said a site outage wouldn't affect their short- or long-term purchasing on that site, a whopping 49 percent said it would, either for the short term -- that is, going to another site for that one purchase -- or the long term -- never returning to that site and becoming loyal to another site.
Toyrus suffers customer crush
Toysrus.com may have realized that a down site is a bad site: At press time, the company issued a release saying customers could get a $10 discount for online purchases of $25 or more through Dec. 1, as well as free shipping.
The company acknowledged its recent site availability problems.
"While we continue to process a huge number of orders, we're concerned that some of our customers have experienced difficulty in accessing the site due to the overwhelming response," CEO Barbour said. "Extending the special discount will make it possible for those people who were unable to get on our Web site to still take advantage of the special offer."
Internet performance measurement firm Keynote Systems (KEYN) recently released a 1999 online holiday
report that tracks the performance and availability of leading e-commerce
sites accessed from home and work. The top 10 sites were chosen based on
rank determined by traffic measurement firm Media Metrix. Performance was
determined by the length of time it took for a page to load, including
text and graphics. Availability rates reflect all failures to download a
Web page because of content, Web server or Internet errors.
Measured performance (in seconds) and availability rates from Oct. 31
to Nov. 6, 1999
SOURCE: Keynote Systems
Boning up on the infrastructure
E-commerce sites have learned from past
experiences that they need to get their technology in place well ahead of
the shopping season. A forecast report from Jupiter estimated that the
number of online shopping transactions taking place this year on the
busiest e-commerce sites would average about 58,000 per day, or 40 orders
per minute. That's nearly twice last year's figure of 29,000 transactions
per day.
Analysts said that if infrastructure upgrades weren't in place by November, at the latest, it would be too late. According to Jupiter's Schatsky, "Unfortunately the window has closed for commerce sites to make any significant infrastructure adjustments before the holiday volume," he said in a late September advisory. "Commerce sites must now focus on contingency plans…and prepare for crisis plans for addressing issues their company might face during an outage."
Many e-commerce sites have concentrated on tacking on more bandwidth and server capacity to their site's infrastructure. Servers are computers that work together managing traffic on a site.
Server capacity is the amount of room for storage and transmission of data. A site's infrastructure is comprised of many layers and has many different servers providing various functions. Bandwidth is the measurement of the amount of data that can be transmitted or received through a connection, usually measured in kilobytes and obtained from Internet service providers (ISPs).
An Internet connection is akin to a data pipeline, and depending on the size of the pipe, sites can send and receive varying amounts of data. If there are more data than can fit in the pipe at one time, a wait is involved until the pipe empties in order to send data. The pipe becomes full with data going back and forth.
Top e-tailers prep for crunch
Getting a jump start on beefing up its site's infrastructure is something barnesandnoble.com (BNBN) took seriously this year, given its outages during the '98 holidays.
"We started in January 1999 to prepare for the season," said Gary King, chief information officer at the company. "We're taking the experience we gained from last year with the knowledge we've gotten from this year's gift-giving holidays and have used it to increase and enhance the capacity of the overall site."
King said his team increased capacity to handle 40 percent more traffic than typical traffic patterns would call for. He also said the company invested a "substantial" amount to support tech efforts, but declined to specify a dollar figure.
"We are constantly testing and monitoring our two sites," King said. "We have a fully redundant site in Virginia and are always looking for weaknesses." King also said his team bulked up technology to support the site's order fulfillment, pick-and-pack shipping operations to enable the back-end to communicate effectively with its front end, giving suppliers the capability to deliver from their locations.
Online music retailer CDNow (CDNW) also has rolled up it sleeves early on to tackle holiday tech issues. Site managers have been working year-round to implement hardware changes, and Russell Cherry, CDNow's vice president of Internet technology, said fourth-quarter upgrades began in August and were rolled out in September and October. The company also sank an additional $1 million into server and network upgrades to prepare for the holiday surge. The additional Web and graphics servers were finalized by Nov. 1, Cherry said.
Cherry's team also focused on load-testing traffic on the site's sub-system, and as a result can accurately pinpoint its capacity. This allowed the company to identify where it needed upgrades and to see how far the system could be pushed before it broke down.
In addition, Cherry said, the tech team made improvements in the order fulfillment process and upgraded order processing software to increase throughput to streamline the entire order and fulfillment process.
Lands' End looks around
Paul Scarpa, an e-commerce technology analyst with Yankee Group, stressed that online shopping sites must address the needs of the entire infrastructure, not just one or two aspects.
"It simply isn't sufficient to just add machines, servers," said Scarpa. "The architecture doesn't work that way. Bottlenecks may not be in the servers or bandwidth but elsewhere."
Scarpa said e-com sites need to understand traffic patterns and analyze results for spikes and add bandwidth in order to handle potential bottleneck problems, add more server capacity to support additional users, and integrate all of this with commerce applications that enable Internet consumers to complete transactions and allow companies to fulfill orders.
Lands' End's Bass said his company was ready for the shopping surge by mid-September and already is working on next year's holiday upgrades for online shoppers. In addition to increasing server capacity and other technical tweaks, the human factor figures prominently into holiday readiness.
The clothier has 3,000 customer service reps who handle online ordering in addition to catalog sales. Additional phone lines were installed to increase bandwidth. And an additional 2,600 people were added to the packing operation to handle the estimated 15 million packages being sent out, which have had a 99.8 percent rate of on-time arrival.
Give the people what they want
Many Web watchers agree that the Internet has spawned users who not only demand customer satisfaction but expect it as a matter of course. The common thinking is along the lines that, with all the available technology around, why shouldn't e-shoppers get what they want, when they want it? Sorry, no C.O.D.s, please.
Analysts said that providing quality customer service, both on and off-line, is key to getting repeat sales online.
E-commerce consultant Gutzman echoes the need for customer assistance to increase exponentially with the surge in shoppers, and maintains this should be received online.
"I think you're going to see a big increase in real-time online customer service in the next month or so," Gutzman said. "Having to disconnect from AOL to use your phone line to make a call just doesn't make any sense. Even if real-time customer service is slow, it's still better than the perpetual 'hold' that we've all come to expect when we call an 800 number."
Calling all customers
Lands' End, already an Internet veteran since it launched its site in 1995, has heeded the customer call. It recently introduced two new customer assistance features, the Lands' End Live personal shopper and Real Time Chat Assistance.
The chat feature enables customers to talk online with company personal shoppers and send messages about products while still online. The service is offered to shoppers 24 hours a day, seven days a week.
For the Lands' End Live feature, customers enter their name and phone number, which sends an electronic signal from their computer to a Lands' End personal shopper. The signal immediately calls the customer back and automatically links the personal shopper and customer together on the phone and the Internet browser. They are able to talk and view Web pages together through a split screen. Customers need a separate phone line or cell phone for this feature.
In the end, e-commerce firms must be cognizant that their sites must pay the same kind of attention to shoppers as land-based stores and perform technological feats flawlessly, working seamlessly to serve the customer.
"Online customers shouldn't be aware of a site's technology," Lands' End's Bass said. "It should be transparent. It's like air conditioning -- you shouldn't be aware that it's on, but you know when it's not working." 
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