ToysRUs, Costco struggle on Cyber Monday

by Juan Carlos Peréz

November 27, 2007 —

U.S. shoppers hit Web stores en masse yesterday during so-called Cyber Monday,
straining the online systems of some well-known vendors like Costco, ToysRUs
and Yahoo that apparently lacked the computing resources to meet the spike in
demand.

Cyber Monday, the first work day after the Thanksgiving holiday weekend in
the U.S., proved an intense online shopping day, causing some sites' response
times to slow to a crawl and payment systems to malfunction.

Costco, which didn't respond to a request for comment, faced major performance
problems on Monday, according to separate reports from two companies that monitor
Web site performance.

Gomez and Keynote separately detected significant performance degradation in
Costco's Web site that
made the shopping experience a torturously slow one for people in the U.S.

The performance problems at Costco slowed down not only the rendering of its
home page, but also processes like searching for products and placing items
on the shopping cart, said Matt Poepsel, Gomez's vice president of performance
strategy.

At its worst point Monday, the Costco home page was taking almost 10 times
longer than usual to load -- instead of about 3 seconds, people had to wait
32 seconds for it to render completely, Poepsel said.

A multi-step process that goes from getting to the home page all the way to
creating a one-item order that usually takes a combined 20 seconds, on Monday
was taking about 180 seconds, with customers facing nagging delays at every
step of the way, he said.

The ToysRUs Web site
also saw a significant performance degradation Monday, although not as bad as
Costco's, according to separate reports from Gomez and Keynote. ToysRUs didn't
reply to a request for comment.

Meanwhile, a Yahoo spokeswoman acknowledged that the flood of online shoppers
caused the checkout transaction processing system of its Merchant platform to
malfunction, affecting the ability of its stores -- mostly small businesses
-- to close sales. According to this Yahoo
status page, the problem began Monday morning and wasn't solved until almost
midnight Pacific Time.

Gomez also reported that TigerDirect's Web site had performance problems on
Monday and took about 24 seconds to load at its worst point. Gilbert Fiorentino,
CEO of TigerDirect, acknowledged that the company's site
ran into performance problems for an hour or two on Monday, but said it recovered
fully and fairly quickly.

He chalked up the issue to a combination of things, including the day's overall
spike in traffic and particular interest in TigerDirect's initiative to donate
to the Susan G. Komen for the Cure group for fighting breast cancer. The consumer-electronics
vendor launched this campaign on Friday and will run it until December 31. Despite
the problems, Monday was a very good sales day, he said.

Keynote also saw issues with the site of home improvement and construction
products vendor Lowe's on
Monday, a repeat of performance problems the site also faced on Friday. Lowe's
spokeswoman Maureen Rich acknowledged that the company's site suffered delays
Monday, which varied in length depending on when and from where people accessed
it. She declined to comment on whether the problems had affected sales.

"We resolved the issue and are investigating what happened," she
said, adding that the site never went down completely at any point in the day.

When a Web site becomes so slow that customers give up on it and leave, the
negative effect of the experience goes beyond that particular instance of a
lost sale, Poepsel said. The inconvenience and disappointment customers feel
erodes their confidence in and loyalty to the company and damages the brand,
he said.

This holiday season, Keynote is tracking 30 major retail Web sites, and so
far has found that about a third of them had significant performance problems
on Friday and Monday when accessed from monitoring points in the U.S., said
Shawn White, Keynote's director of external operations.

"A lot of these Web sites have done a good job optimizing their home page,
making it fast to download and really capturing that potential customer coming
in, but where we see many performance issues is during the shopping experience,"
White said.

The problems seem more common among brick-and-mortar retailers that are still
trying to perfect their online stores, he said. These vendors aren't load-testing
their sites properly prior to big shopping days like Cyber Monday, so their
systems wobble when there is an extraordinary spike in traffic, White said.

"A lot of traditional brick-and-mortar companies are jumping in on the
bandwagon of online shopping this year more so than any other year, and they
really need to understand the importance of Web site performance and availability,"
White said.

E-commerce sites were very busy on Monday and Friday, according to Akamai,
which tracked usage of more than 300 such sites.

Aggregate traffic from North America to this group of Web sites reached a peak
of almost 3 million visitors per minute at around 2 p.m. ET on Monday, a 37
percent increase over 2006's Cyber Monday. Global traffic hit a peak of 4.6
million visitors per minute, up 30 percent. On Friday, traffic peaked at around
4 million visitors per minute, up from about 3 million on the same day last
year, according to Akamai.

Online retail spending hit US$531 million on Friday, up 22 percent, while Monday
was expected to generate over $700 million, according to comScore.

On Sunday, Shop.org, the e-commerce arm of the National Retail Federation retailers'
trade group, released the results of a survey forecasting that significantly
more U.S. residents would shop online on Cyber Monday this year than last year.
The survey predicted that about 72 million people would shop online, compared
with a little more than 60 million last year.

IDG News Service