The 10 million new cybershoppers clicking “buy” buttons this Christmas season could make or break an e-commerce company and even the e-business industry, depending on their first impressions of the experience, warned Ken Cassar, a senior analyst at the research firm Jupiter Communications Inc., New York.
According to Jupiter’s Holiday Shopping report released this week, $6 billion will be spent online during the Christmas season this year, November and December, compared with $3.1 billion spent last year. “Web sites have been warned to know what to expect, and they have no excuses this time,” Cassar said. “The optimist in me says that people have learned their lessons from last year, but the realist in me doubts that.” Cassar also said that the Internet community stands to lose if even a few Internet merchants fail to satisfy customer expectations.
The number of satisfied shoppers dropped from 88 percent in July last year to 74 percent in January this year, according to the report. One reason for this is the growth in online transactions, which will be leaping from 15,000 per day to a predicted 58,000 per day at some of the major commerce sites during the Christmas period, causing some Web sties to dysfunction because of traffic jams.
David Schatsky, an analyst who specializes in e-commerce infrastructure issues said merchants should think about how to fail gracefully as opposed to catastrophically. He encouraged them to do some careful capacity planning to get a better handle on what their volumes would likely be.
“. . . Failures do occur. . . Merchants should be addressing, on the hardware level, how they should build their data centers accordingly. It might behoove a lot of companies to outsource their systems at least for the holiday season, particularly their fulfillment- and it would help to find a company that has done it in the holiday season before.”
He said that systems should be in place and ought to have been tested by October, otherwise it is probably too late.
Of the $6 billion to be spent online this season, $5 will be on products and $1 billion on travel services. Overall e-commerce sales will further grow to $78 billion by 2003, Jupiter expects.