Retailers   //   November 25, 2019

Retailers are trying to prepare for holiday tech failures

‘Tis the season: Businesses large and small are bracing for the holiday gift-buying blitz. On the one hand, they are hoping to sell as much product as possible. Meanwhile, they’re feverishly trying to ensure the proper infrastructure is in place to handle the added stress.

Black Friday happens this week, but many sales are beginning earlier than that. This year is going to be especially anxiety-inducing — Black Friday is the last day of November, meaning there’s less time than usual between Thanksgiving and Christmas day. And retail companies are trying to sell as much as they can while making sure all the proper infrastructure is in place to handle the fervor.

This year especially is expected to put a lot of retailers under an immense amount of pressure. “Our sense is that retailers are gearing up for a highly competitive holiday period, with many pointing to an elevated promotional dynamic in 3Q,” wrote Cowen analyst Oliver Chen in a new research report focusing on the larger retail players. “This will only intensify into the holiday period, especially given six fewer shopping days, and earlier guaranteed delivery cut-offs.”

Big businesses are bracing
A new Harris Poll study commissioned by Google Cloud tries to quantify this anxiety. The survey queried 200 US retail executives about what they expected the big pain-points to be over the next few weeks. 46% of them expected their businesses’ online traffic to increase as compared to the previous year. Meanwhile, only a little more than half were confident that their companies were prepared for the holidays. What’s more, 80% said they were “at least somewhat concerned about the efficacy of their supply chain during Black Friday and Cyber Monday.”

The thrust is that retailers are expecting a lot of demand, and some are worried they’ll be able to handle it all. The big issue, said Google Cloud’s retail lead Carrie Tharp, is that “there are a lot of different potential failure points in the retail stack.” Big companies promoting even bigger sales fear the websites won’t be able to withstand the traffic. Last year alone big retailers like Walmart, Lowe’s and J.Crew all experienced some form of downtime during Black Friday. This year, Tharp said, Google Cloud has seen “a significant increase” in retailers looking for bespoke back-end solutions to help them deal with their holiday sales.

While some of these brands are looking to use tools to help better customize their online retail experiences, others are simply trying to be best prepared for whatever technology issues come their way. “A second in lag-time can mean a sale and an abandoned cart,” Tharp said. Google began offering these retail services a few years ago to select big companies, but is now expanding it to many others, she explained.

For smaller players, different woes
While site speed and uptime are top of mind for larger players, smaller businesses have other holiday-related issues to worry about. The direct-to-consumer cookware brand Milo, for example, has been preparing for months. Last year was its first holiday season, and it severely underestimated demand. “We had all these guarantees,” said co-founder Zach Schau. Essentially the cookware company had promised customers that if they ordered by a certain time, the product would be delivered in time for Christmas. But Milo didn’t expect the volume of orders it received. “We did our best but it wasn’t quite good enough,” Schau said. 

This year, Milo wants things to be different; It relies on an array of fulfillment services to complete orders and has been making sure it has enough stock and has the correct shipping processes in place. According to Schau, Milo began strategizing for this year’s holiday season as far back as last June. “Our fulfillment partner needs a lot of extra buffer time to make sure they have their ducks in order to ship in volume,” he said.

He’s not necessarily worried that his site is going to go down — Milo isn’t a brand to that scale just yet — but Schau certainly doesn’t want a redux of last year’s broken holiday promises. “There are growing pains and hurdles,” he said, and all issues with the supply chain and fulfillment “rev up exponentially” during the holidays. For DTCs that rely on external services to make things run smoothly, they very likely have been trying to make sure everything is in place for when the holidays hit.

Overall, the general tenor for all companies expecting a holiday bonanza is to wait and see. Data shows that this year’s shortened season will likely lead to a more concentrated sales period. And everyone is trying to make sure they have the right safeguards in place to handle the onslaught. “The e-commerce and mar-tech stack is very complex,” said Tharp.

One piece of good news for smaller businesses is that consumers may be a little more forgiving. While a customer may abandon a cart on a big platform and try to buy something elsewhere, when Milo messed up the customers seemed empathetic. “They get it,” said Schau. “We were humans — we weren’t robots answering questions.”