3 Tips for Improving Your Online Retail Operations
By Glen Burson - Chief Technology Officer at Salmon
Ecommerce operations have come a long way from as close as two years ago when, on Black Friday 2014, the operations of many of the UK’s largest retailers just couldn’t cope with the surge in demand, leading to many sites going down. In 2016, the difference was palpable. Retailers’ operations were tested in advance, and it was the biggest online shopping period of the year.
What has characterised the past few years from an operational perspective?
Operationally, we have seen a growth in the need for system interconnectivity.
The consumer desire for same-day/next-day delivery has put enormous stresses on companies’ fulfilment and operations systems, as inventory now has to be ready to be dispatched almost immediately after purchase. It’s therefore crucial that back-end systems are heavily interconnected. Ecommerce systems now incorporate myriad platforms: payment transactions (for example, with PayPal), credit card clearers, a search service, and a content service.
All of these platforms need to work collectively and equally quickly for retailers to survive heavy loads during peak period. If one platform slows, this could decelerate the whole process; the payment transaction service might be quick, but if the search service is clunky, the customer might not even make it to the payment screen.
Finally, a customer’s experience on the website has to be just as fluid. With the growing demands of immediacy, customers no longer expect to wait for payment processing or order confirmation. This means that pricing, inventory and fulfilment systems need to interconnect and interact immediately.
Black Friday and its impact on operations
Black Friday is no longer a one-day phenomenon. We’re now seeing the majority of retailers participate in Black Friday sales well before the actual event. We labelled it ‘Black FiveDay’ in 2016, as most of the traffic and orders appeared from Thursday 24th November – Monday 28th November. This spread in promotions over a longer period has had its impact on operations, which we saw in the Salmon Peak Operations Centre.
It’s no longer the case that on the stroke of midnight on Black Friday a company’s website will be flooded with consumers looking for the deal as soon as it goes live. This is good from a systems point of view, as we saw the load balanced out across a 24 or 48 hour period.
We’ve been evolving over the past few years, too. We’re now able to be smarter in gleaning information about the system and what information we can pull from it. Crucially, being able to rapidly react to situations is key. If there are any unforeseen operational issues arising during Black Friday peak – for example a volume issue whereby the orders cannot be processed quickly enough out of the system and then sent to the warehouse in time – all the right skills, from operations people to software developers, need to be on hand to achieve a timely resolution.
The rise of mobile during this Black Friday period also affected operations, but in a good way. A few years ago before mobile shopping became mainstream, servers became clogged on the Friday morning as soon as people got into work. Nowadays, people don’t have to be bound to their desks; they are shopping on-the-go on their way to work, meaning the shopping frenzy that once occurred at 9:15am in recent years is starting to dissipate. Clearly, this is only good news for the servers.
What have we learnt from 2016?
One of the things we’ve learnt from this year is that we’re getting better and better in dealing with the ‘peaks’ phenomenon. We’re slowly gathering more and more information from our data centres and cloud computing has allowed us to scale systems to a point where they can deal with extremely heavy loads.
While the front-end web experience has worked really well this year, it’s the back-end where there is some catching up to do. The interconnectivity of systems for order capture, payments, communications and fulfilment needs to be improved across the industry.
We’ve also learnt that retailers don’t have to conform to the Black Friday/Christmas sales to stand out. In what we’re terming ‘Proactive Peaks’, retailers are creating their own special days to maximise sales. Amazon Prime Day has been a bigger hit this year than last, as Prime customers flocked to the website for one day only to get discounted goods. Habitat launched its own sale a week before Black Friday, specifically around furniture, to lure consumers ahead of the normal sales week. In 2017, expect to see more retailers create their own unique events in a bid to stand out in a crowded market.
Tips for the new year
To help keep your operations in check, here are some top tips for the year ahead:
- When you’re stress-testing your systems to see what they’re capable of doing, make sure you test them in their totality – everything from back-end including fulfilment systems and services they connect to, right up to the front-end with payment transaction and search fluidity
- Examine all aspects of potential system failure and plan ahead with your provider’s support teams. If your payment provider’s service slows down with heavy loads, do you have the ability to change or fix it if it is impacting the customer experience?
- Proactively look at the data you’re working with, so you can head off any problems before they occur. Implement an operations dashboard so that you can proactively respond to issues before they’re escalated.
A good operations system is the backbone of any successful retailer, and it’s more important than ever to make sure they are fluid, efficient and reliable during peak trading periods. An interesting year for ecommerce lies ahead…