Consumer spending set to break records this Black Friday but retailers must focus on digital experience to take advantage
By James Harvey, CTO Advisor EMEA, Cisco AppDynamics
The big seasonal shopping dates like Black Friday, Cyber Monday and Singles Day are around the corner, and consumers across the world are getting ready to take full advantage.
Continuing an ongoing trend, consumers will be looking to do more of their holiday shopping online as opposed to in store this year, with high costs of living putting pressure on shoppers to find the very best deals on the things they need – from food and drink and homewares, through to gifts for loved ones and new outfits for holiday parties.
Application owners need to prepare themselves for unprecedented levels of traffic over Black Friday and Cyber Monday. Consumers will be swarming to their applications and digital services, and they will be ready to spend. The opportunity to attract new customers and increase revenues will be enormous.
However, brands must beware – if consumers encounter a poor digital experience, then they will be completely unforgiving. Shoppers will walk away from any online retailer that fails to provide a brilliant and seamless digital experience.
This is why retailers need to ensure that their IT teams have the tools and insights required to optimise application availability and performance at all times.
More traffic and higher transaction values expected this holiday season
At Cisco AppDynamics, we recently surveyed 12,000+ global consumers exploring their attitudes and intentions around seasonal shopping moments such as Black Friday and holiday sales this year.
The research found that 43% of consumers expect to do more of their holiday shopping online (through applications and digital services) this Black Friday and Cyber Monday compared to last year, compared with only 13% who expect to do less. Shoppers are favoring online over in-store as they believe they can make their budgets stretch further (48% of consumers), get more choice (42%) and avoid last minute panic buying in the shops (31%)!
Consumers haven’t got time for exhausting, day-long holiday shopping expeditions and they want the ease and convenience that online shopping delivers. In fact, 20% of people admit that they will be doing more online shopping this year because it means they can shop during working hours!
Significantly, the research reveals that transaction values for online shopping are likely to rise considerably over the holiday period. On average, consumers expect that 59% of their spending on Black Friday and Cyber Monday will be online this year versus in-store, compared to 53% last year.
For brands, this represents a massive opportunity to boost sales during the most important period of the retail calendar. For instance, in the U.S, where $9.12 billion was spent online during Black Friday last year, this would mean an increase of more than $1 billion in consumer spending on this one day alone!
Shoppers will have zero tolerance for poor digital experiences
Retailers will be gearing up to take full advantage of this unprecedented opportunity, offering great deals to attract new customers to their applications and digital services. But they need to recognise that consumers aren’t just looking for low prices – they’re also demanding world-class digital experiences.
Indeed, 66% of consumers claim that it doesn’t matter how good the deals are that retailers are offering, there is simply no excuse for poor online shopping experiences.
With consumers becoming ever more sophisticated in their use of digital services, expectations related to thedigital experience continue to rise exponentially. And, alarmingly for retailers, people’s reactions when they encounter problems – whether that’s slow loading pages, payment issues or downtime – are becoming more extreme. They’re left feeling anxious and angry, and they’re not willing to forgive and forget. In fact, more than half (58%) of consumers claim that retail brands will have one shot to impress them this holiday season, and if their application experience isn’t perfect, they won’t use it again.
Seasonal goodwill will disappear the moment customers encounter a bad online shopping experience. People will simply turn their back on the brand in question and go elsewhere. That could mean heading to a rival application or it could even mean ditching digital services altogether and returning to the shops.
Application observability will allow retailers to meet heightened demand this holiday season
Retailers therefore need to ensure that their applications are able to stand up to the dramatic spikes in demand that the holiday season brings. But for the vast majority of IT departments, this is easier said than done.
As a result of rapid digital transformation across the retail industry, many IT teams now find themselves managing an increasingly dispersed and complex application environment. They’re struggling to get visibility into Kubernetes environments and they can’t get a clear line of sight for applications where components are running across cloud and on premises environments.
Retailers therefore need to implement an application observability solution with the flexibility to span across hybrid environments. Application observability provides a single source of truth for all technologists, making it easier for technologists to rapidly identify and remediate issues.
Crucially, with application observability, technologists can correlate application performance data with key business metrics like conversions so that they can prioritise those issues which could do most damage to digital experience and, ultimately, the bottom line.
The message for retailers is clear; shoppers are ready to ramp up their online spending this holiday season but they’re expecting retailers to combine great deals with brilliant, seamless digital experiences. Application owners that are able to meet this dual challenge will be primed to drive record sales, those that don’t risk seeing customers walking away en masse.