The Need for Speed - A CIO Imperative for Valentine’s Day & Beyond
Holiday 2014 was a great season for e-commerce brands. According to the Mobile Holiday Shopping Report Card, online shopping racked up $53.3 billion in sales, an increase of 15 percent over the 2013 season. Yet the holiday selling season did not deliver happiness for all customers. While the Internet has become faster and mobile shopping is reaching critical mass, many e-commerce sites are actually slowing down as they try to adjust to higher volume across multiple channels. Long wait times, uneven shopping experiences and website outages fueled growing frustration for holiday shoppers.
With the holidays behind us, e-commerce retailers must now gear up to clear another big hurdle ─ successfully delivering love on Valentine’s Day. According to the latest NRF survey data, Valentine’s Day sales are going to be significant, reaching $18.9 billion (a survey high), with more than 40 percent of Valentine’s gifts purchased via mobile devices. While January is traditionally a slow month for shopping, the Valentine’s Day holiday can become a turning point for retail profitability for Q1. As more customers turn to online and mobile to quickly secure the perfect gift, will e-commerce retailers perform at the top of their game for this big selling season?
They will if they prioritize the mobile experience. While most online shopping is still conducted on desktops, the future shopper is mobile. This past year, mobile devices outpaced PCs for online browsing, while tablets accounted for 52.1 percent of all U.S. online traffic. On Thanksgiving Day, 50 percent of all online traffic came from mobile devices, and more than a third of online purchases came from mobile devices. For the most part shoppers were using smartphones to browse and tablets to buy, making mobile devices the primary gateway to a purchase. Mobile-enabled shopping represented as much as 27 perent of all online sales for Black Friday 2014, up from 20 percent during the same period last year. Nearly 60 percent of all Amazon.com customers shopped using a mobile device over the holiday season.
Yet with this fast pace of mobile e-commerce adoption, the underlying technology that delivers online shopping experiences is antiquated and has not seen meaningful innovation in over a decade. E-commerce companies continue to operate with outdated legacy content delivery network (CDN) systems that weren’t built to accommodate the plethora of platforms that allow for mobile browsing and purchase agility. Traditional web delivery relied on users with fast, fixed, and reliable connections, but performance challenges inherent in wireless connections are making CDNs obsolete. Shoppers are no longer fixed and stationary, nor are they tolerant of slow, substandard shopping experiences.
E-commerce brands must deal with a new generation of customers who grew up online, had smartphones in grade school and have outsized expectations that things work fast. Millennial shoppers, a key demographic target for many retailers, maintain an annual buying power of $600 billion and that number is growing. This breed of customer is notoriously fickle in their brand loyalty, and they love to shop across multiple devices. The reality for e-commerce is that speed and performance are mandatory deliverables in order to satisfy the expectations of today’s shoppers. As mobile engagement becomes the norm, e-commerce brands must rethink their overall strategy to capitalize on this opportunity.
Fortunately, a new wave of technologies are emerging which will have a significant impact on digital business. The convergence of cloud and mobile computing will continue to promote the growth of next generation web applications that are more powerful, more scalable and more flexible and can quickly be delivered to any device. For example, Software-Defined Application Delivery (SDAD) is a component of cloud/client computing, a new delivery method that helps reduce mobile load times by as much as 75 percent. This is just one piece of a larger mosaic of sweeping technology changes that will profoundly affect CIO decision making, and in turn greatly improve the customer experience. It will also enable new ways to design and deliver applications and content, which provide faster time to market, a personalized end-user experience and improved business agility. Cloud/client computing has been identified as one of Gartner’s Key Strategic Technology Trends for 2015.
As I have previously written, cloud/client computing has the potential to become the “big data” of 2015. In the past few years, e-commerce and m-commerce brands have embraced big data in order to better understand their customers. As the industry begins to adapt to changing user behavior and platform proliferation, investments in infrastructure will deliver on the promise of catering to customers with a better online experience. Speed and agility are critical imperatives ─ you can’t be a customer-centric, digital organization without evolving your technology infrastructure to meet these demands. It’s about delivering on the last mile of a quality customer experience, saving the customer precious time and placing a value on the need for speed as the ultimate customer benefit. This is what your customers expect, and retail and e-commerce organizations must now rethink their strategies to meet expectations or risk irrelevance.