Etailers not addressing the ecommerce challenges that the festive season may bring

November 7, 2008 —

With etailers expecting to generate more than US$200billion of revenue in 2008 from ecommerce, one in four companies are concerned that their websites cannot cope with the demands of their busiest time - the festive season. The "Ecommerce Business Risk Survey", conducted by software and quality assurance company AppLabs, reveals that 90% of the organisations surveyed feel if their website did not cope with demand it would have a serious impact on their business - either overall, to their brand or customer loyalty.

The well publicised case of Sainsbury's this year is an example of the business risk etailers are faced with. The retailer reportedly lost nearly Â£1m in sales when its online grocery website went down for three days, and that rivals such as Ocado, Tesco and Asda had picked up new customers who switched. In addition, Sainsbury's had to bear the additional cost of offering affected shoppers Â£10 vouchers as compensation.

Not surprisingly the AppLabs survey revealed that nearly 60% of respondents stated that their website was either very important or critical to their business, as organisations are increasingly reliant on their websites to interact with customers, carry out transactions and promote their brands. Some 40% consider that a website crash would impact their overall business, whilst a further 50% felt that their customer loyalty and corporate brand would be negatively impacted. It is also evident that even though over 50% thought that security issues and performance issues would be the most frustrating for their customers, only 36% (security) and 32% (performance) thought they adopted best practice in these areas.

Online shopping reached an all time high in the run up to Christmas last year, with Â£15.2 billion spent online in October to December 2007 bringing full year UK e-retail sales to Â£46.6 billion, up 54% on the Â£30.2 billion recorded for 2006, according to the â€˜IMRG Capgemini e-Retail Sales Index'. Whilst the figures for this year will not be available until early next year, the "credit crunch" is expected to urge consumers to look for greater discounts online.

Although the survey demonstrates some positives for the approach to testing organizations are taking, it is clear that there is significant room for improvement. A high proportion of respondents (37%) were from a testing background, either in Test Management or testing roles; with more than 25% of respondents were in Project Management through to C-Level positions within their respective organization.

The main conclusions that can be drawn from the survey are that despite the obvious criticality to the business, and the acknowledgement of the areas of greatest risk, not enough is being done to address the issues. In a competitive climate where any breach of online security or failure of an online service can generate hostile publicity, there is no room for complacency. The availability and use of high quality testing enables all organisations to make the most of their website capabilities.

AppLabs has a strong focus on delivering world class Performance testing services, whether on-site at customer locations, or through our extensive lab facilities across the globe. The company has developed relationships with all the major testing tool vendors in this space to ensure they can provide clients with the exact solution to their requirements. The Ecommerce Business Risk Survey can be downloaded from: http://applabs.com/int_app/App_Ecommerce_Risk_Report_1v00.pdf