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How the glitch stole Christmas?
Major retail Web sites experience intermittent outages, with peak period imminent.
December 13, 2004: 5:48 PM EST

NEW YORK (CNN/Money) - Online shoppers can expect more of the intermittent outages and delays that have plagued popular retail sites in recent weeks as the holiday season reaches its peak.

The problems, according to analysts, have been widespread, with breakdowns or slowdowns occurring everywhere from Amazon.com and Kmart.com to L.L. Bean's site.

"The mass market retailers have shown the most wear and tear," said Matthew Poepsel, director of product management for Gomez, which performs automated shopping searches.

He said the nation's apparel sites seem to be working the most consistently, followed by computer and electronics, but the mass market sites -- led by Amazon.com -- have had the most problems with product availability and response time.

Analysts say the glitches are not just due to the extra holiday traffic that has poured into the sites. They're also due to the complexity of the sites, many of which need to be updated, according to David Fry, chief executive of Fry Inc., which builds and operates Web sites.

"The systems have not been invested in and the demands on the sites are higher," he said. "We're expecting more information, better customer experiences, and more tools to make our decisions."

Sites now do a lot more than take orders. They often check for inventory and promotions, figure out complex tax and shipping formulas, and connect with a third party system to check for buyer fraud. Fry said that as these systems back up it creates a "cascading effect."

"It's something like waiting for planes to take off at LaGuardia [Airport] in the summer," he said. When one plane is delayed, everything behind it gets delayed.

Fry said a lot of companies didn't invest in updating their Web sites in 2002 and 2003, when business was slower. "Some systems are showing their age," he said.

Fry's advice is for retailers to do a lot more load testing. They often discover that the clog isn't where they had anticipated.

Problems are costly

The impact on businesses is significant, according to Terry Meehan, director of strategic marketing for Gomez.

Problems can result in lost sales or higher costs. He said that frustrated customers sometimes turn to other Internet sites or they call the retailer. While an Internet order costs pennies, a customer service phone call could cost at least $5 to $8.

The logjam isn't yet over. Meehan said some key dates remain, including Dec. 14, the last day to order so that the U.S. Postal Service can make a regular holiday delivery, and Dec. 20, the last day for a regular Fedex shipment to arrive before Christmas.

But the glitches aren't keeping shoppers off the net.

"Things have been going very well," said Amy Colella, a spokeswoman for Walmart.com.

Despite one brief breakdown last week for a few minutes, Colella said the site has seen the number of visitors soar. She said there were 16 million visitors last week, about double the usual number, and she expects the same number to click in this week.

Customers, she said, are responding to the on-line specials as well as turning to the Web site for product information before making in-store purchases.

comScore Networks predicts that this year's on-line non-travel retail spending will exceed $15 billion during the holiday season. That's at a 23 percent to 26 percent increase over last year.

Online retail spending through Dec. 5 had reached $8.41 billion, a 23 percent increase, according to comScore. Last year, online sales peaked on Dec. 9, but comScore predicts that this year's peak day may not occur until Dec. 13 or 14.

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Graham Mudd, an analyst with comScore, said the surge in broadband usage has helped drive traffic. He said about half of all home Internet users have broadband, which makes shopping much faster.

However, most people do their shopping at work in the afternoon.

"Workplace buyers account for about half the users," said Mudd.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.