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2016 Holiday Retail Insights Report WHAT DO SHOPPERS EXPECT FROM YOUR SITE? AND HOW CAN YOU MEET THEIR DEMANDS?
1 | SOASTA: Performance Is Everything
2016 Holiday Retail Insights ReportWHAT DO SHOPPERS EXPECT FROM YOUR SITE? AND HOW CAN YOU MEET THEIR DEMANDS?
2 | SOASTA: Performance Is Everything
2.4
PAGE 4In 2015, 57% of Black Friday traffic came from
mobile
PAGE 5 Amazon accounted
for more than a third of 2015 online
holiday spending
PAGE 10The “sweet spot” for peak conversions is 2.4 seconds
PAGE 18Just a 1-second slowdown resulted in an 8% increase in bounce rate
PAGE 7 28% of customers
won’t return to a slow site
Key insights
2 | SOASTA: Performance Is Everything
3 | SOASTA: Performance Is Everything
This holiday season, the National Retail Federation projects that online sales will increase by up to 10 percent
The NRF also says that total holiday retail sales, including ecommerce, are expected to increase 3.6% over last year, to $655.8 billion.
These projections are the continuation of an upward trend. The 2015 holiday season saw the first nine-day streak of sales over a billion dollars during the spending rush between Thanksgiving and Christmas Eve. And in the past decade, Cyber Monday sales alone have grown from millions to billions of dollars.
$3B
$2.5B
$2B
$1.5B
$1B
$0.5B
02006 2007 2008 2009
Cyber Monday sales
*estimated with 12% growth
2010 2011 2012 2013 2014 2015 2016*
4 | SOASTA: Performance Is Everything
Holiday shoppers are demanding
Shoppers are everywhere. And regardless of where they are and what type of device they’re using, they expect consistently fast, seamless transactions.
Retailers today face enormous challenges in delivering the fast, reliable, 24x7 omnichannel experience across multiple devices that users demand — and they won’t wait around for you to get it right. According to Aberdeen Group research, after only 3 seconds, 40 percent of all mobile and desktop websites will be abandoned – up from 25 percent in 2013. Where are those shoppers going? To websites that can meet their performance expectations.
1 Sources: IBM Black Friday 2015, Google Holiday Shopping Trends, Adobe Cyber Monday Sales Report 2015
Meeting consumers’ multi-platform demands matters
more than ever:
of Black Friday traffic in 2015 was from mobile devices.
of Cyber Monday sales happened via mobile.
of all holiday sales are influenced digitally — that is, by shoppers using their desktop or mobile devices to research before they buy.1
57%
28%
78%
5 | SOASTA: Performance Is Everything
Why you need to think like Amazon
In 2015, Amazon accounted for a whopping 34.5% of all online holiday sales. Why? Massive inventory, competitive pricing, and free shipping are part of the equation. So is customer experience.
Amazon has become the gold standard for user experience. While most retailers simply focus on driving visitors to websites, Amazon has built an online business based on understanding their visitors through data science and performance analytics.
Amazon was an extremely early adopter in the study of how seconds — and sometimes even milliseconds — of latency can affect bounce rates, conversion rates, sales and revenue. The company continuously monitors, measures, collects, keeps, and exploits information about every user experience. They use that data to continuously improve what they’re doing. They know that when they improve the user experience, they improve the overall performance of their business.
Amazon’s superior buying experience is the reason why it enjoys a 13% conversion rate — 74% for Amazon Prime members — and takes more than a third of all holiday online sales.
amazon.com
All other online retailers
65.5%
34.5%
53%of consumers say Amazon offers the best online shopping experience.
In 2015, Amazon took more than a third of all holiday sales
6 | SOASTA: Performance Is Everything
There’s no question about it: Downtime costs
Downtime costs in several ways. There is a correlation between downtime and market value of brands. There’s also a significant negative correlation between outage announcements and stock returns.
The hourly cost of downtime varies by industry and size of the brand (of course) but estimates are all mind-boggling. A 20-minute Amazon outage cost about $3.75 million, for example. For Fortune 1000 companies, the average total cost of unplanned application downtime per year is $1.25 billion to $2.5 billion. The average hourly cost of an infrastructure failure is $100,000 per hour.
Outages can also hurt your brand and reputation. A July 2016 outage at PayPal led shoppers to experience being locked out of their accounts with no solid explanation about why this was happening. The anxiety produced can have long-term negative effects on the brand.
For Fortune 1000 companies, the average total cost of unplanned
application downtime per year is
$1.25 billion
7 | SOASTA: Performance Is Everything
Over the long term, slowdowns cost, too
The slow-drip water torture of an underperforming site can be less dramatic. Slow websites don’t generate headlines. They’re quieter, but potentially much more damaging to your brand over time. You may intuitively feel this to be true. A slow site with poor user experience causes most of us to give up — especially if there is a worthy competitor a click away. 28%
9%
of customers won’t return to a slow site
of customers won’t return after an outage
8 | SOASTA: Performance Is Everything
How fast do holiday shoppers expect your site to be? Are these expectations static, or do they change over time?
To help answer these questions, SOASTA conducted a study in which we analyzed real user data — representing millions of user sessions — for ten leading IR100 retailers during Cyber Week 2014 and Cyber Week 2015.1 The study included more than 1.5 billion beacons worth of user data — 983.9K from 2014 and 680.9K from 2015.
The objective was to see what differences, if any, there were in user behavior and conversion outcomes, and to make predictions for 2016. The findings are outlined on the following pages.
1 “Cyber Week” was defined as November 27 to December 2 in 2014, and November 26 to December 1 in 2015.
The load time “sweet spot” for peak conversions is 2.4 seconds1
10 | SOASTA: Performance Is Everything
Finding 1
The performance “sweet spot” — the load time that corresponds to peak conversions — for peak conversions shrank by 37% between 2014 and 2015. Looking at all user sessions that resulted in conversions, the peak conversion rate correlated with much faster page load times (2.4 seconds) in 2015 than in 2014 (3.8s). In other words, consumer expectations and behavior shifted sharply toward a preference for pages that were 37% faster.
0
0.5%
1%
1.5%
2%
2.5%
3%
3.5%
4%
4.5%
5%
5.5%
6%
1s
1.4s
1.8s
2.2s
2.6s 3s
3.4s
3.8s
4.2s
4.6s 5s
5.4s
5.8s
6.2s
6.6s 7s
7.4s
7.8s
8.2s
8.8s
9.2s
9.6s 10
s
10.4
s
10.8
s
11.2
s
11.6
s
12s
2014 2015
Between 2014 and 2015, the optimal load time for peak conversions shifted from 3.8
seconds to 2.4 seconds
In 2016, the performance sweet spot could be 2 seconds or less2
12 | SOASTA: Performance Is Everything
Finding 2
Following this trajectory, it’s safe to predict that consumer expectations are likely to increase, not decrease. In the 2016 holiday shopping season, it’s possible that we may see peak conversion rates correspond to load times of 2 seconds or less.
3.0
3.5
2.5
2.0
1.5
1.0
0.5
02014 2015 2016
3.8
2.4
2
In the 2016 holiday season, the optimal load time for conversions
could be 2 seconds or less
Overall load times improved between 2014 and 20153
14 | SOASTA: Performance Is Everything
Finding 3
Looking at the distribution of converted traffic for both years, more shoppers experienced faster load times in 2015. Most users experienced page loads between 2.2 seconds and 4.2 seconds, compared to 2014, when the bulk of converted traffic experiences load times between 3 and 5.8 seconds.
However, if site owners focus solely on this load time improvement without correlating it to business metrics, they risk missing other trends, outlined on the following pages, that should be cause for concern.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1
1.4
1.8
2.2
2.6 3
3.4
3.8
4.2
4.6 5
5.4
5.8
6.2
6.6 7
7.4
7.8
8.2
8.8
9.2
9.6 10
10.4
10.8
11.2
11.6
2014 2015
In 2015, fewer shoppers experienced optimal load times4
16 | SOASTA: Performance Is Everything
Finding 4
Looking at the individual graphs for each year illustrates a compelling finding: in 2015, many visitors did not experience “sweet spot” load times. There is a pronounced gap between the bulk of converted traffic and the 2.4-second peak conversion rate.
Compare this to the converted shoppers in 2014, who fell neatly within the sweet spot.
0
Sessions
Sess
ions
Co
nver
sio
n ra
te (%
)
Conversion rate (%)
Most shoppers did not experienceoptimal load times
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0
0.69
1.39
2.08
2.78
3.47
4.16
4.86
5.55
1 1.4 1.8 2.2 2.6 3 3.4 3.8 4.2 4.6 5 5.4 5.8 6.2 6.6 7 7.4 7.8 8.2 8.8 9.2 9.6 10 10.4 10.8 11.2 11.6 12
0
Sessions
Sess
ions
Co
nver
sio
n ra
te (%
)
Conversion rate (%)
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0
0.69
1.39
2.08
2.78
3.47
4.16
4.86
5.55
1 1.4 1.8 2.2 2.6 3 3.4 3.8 4.2 4.6 5 5.4 5.8 6.2 6.6 7 7.4 7.8 8.2 8.8 9.2 9.6 10 10.4 10.8 11.2 11.6 12
Slower pages experienced up to a 58% increase in bounce rate5
18 | SOASTA: Performance Is Everything
Finding 5
Looking at the 2015 numbers, we found a strong correlation between load time and bounce rate. For pages that loaded in 2 seconds, the median bounce rate was 26%, while pages that took 10 seconds to load experienced a 41% bounce rate. In other words, the cost of an 8-second slowdown — from 2 to 10 seconds — was a 58% increase in bounce rate.
It’s worth noting that the cost of smaller slowdowns was significant, as well. Just a 1-second slowdown (from 2 to 3 seconds) resulted in an almost 8% increase in bounce rate, while a 5-second slowdown (from 2 to 7 seconds) resulted in a 42% increase in bounce rate.
30%
35%
40%
25%
20%
15%
10%
5%
02s 3s 4s 5s
Bounce rate
6s 7s 8s 9s 10s
A 1-second slowdown resulted in an 8% increase in bounce rate
Pages that loaded in 2 seconds had a 26% bounce rate
Pages that loaded in 10 seconds had a 41% bounce rate
19 | SOASTA: Performance Is Everything
Preparing your site for the holidays requires a balance between making it reliable and making it fast. Continually improve your site, monitoring throughout the year and tweaking it to keep it in top shape. Because yes, the holidays are going to test you to your limit — but so might your annual Christmas in July sale.
Create an environment of continuous testing and continual improvement in your organization. Using a combination of synthetic and real user monitoring (RUM), make sure that both development and operations people are on board with making performance an integral feature to your site.
How to prepare your site for the holidays (and other peak traffic events)
20 | SOASTA: Performance Is Everything
1 . MEASURE REAL USER BEHAVIOR
Real user measurement (RUM) tools provide real-time and predictive analytics across the full internet stack including back-end, front-end, and last-mile network conditions, across multiple devices, platforms, and frameworks — and everything in between.
Other features and benefits:
• Understand the impact of third parties on site performance
• Reduce false alarms with meaningful and intelligent alerts based on performance
• Track end-to-end performance through integration with marketing, synthetic monitoring, and application performance monitoring (APM) tools
• Support modern applications and single-page app (SPA) frameworks
L E A R N M O R E
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2. ANALYZE YOUR USER DATA FOR INSIGHTS INTO YOUR CUSTOMERS AND BUSINESS
Your RUM tool should integrate with an analytics engine to provide you with critical insight into real user behavior. You need to correlate this behavior with business metrics — such as conversions and revenue — so you can prioritize the performance optimizations that will give you the most impact on your business.
Other features and benefits:
• Weigh business outcomes of technical changes with predictive analytics
• Prioritize page fixes
• Build more accurate performance tests with session path analysis
L E A R N M O R E
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22 | SOASTA: Performance Is Everything
3. CONDUCT RAPID PERFORMANCE TESTING — AT SCALE — TO SIMULATE REAL-WORLD CONDITIONS
To prepare your site for seasonal readiness, launches, flash sales, and other peak traffic events, you must be able to scale to millions of virtual users — worldwide — with realtime control over the number and mix of virtual users. You need to be able to quickly verify your site’s reliability under realistic conditions, and you need to know your capacity limits. You should also be able to simulate network conditions, flow control, SLAs, and dynamic data parameterization.
Ideally, your testing tool should integrate with your RUM tool. Having a detailed understanding of common user paths will enable you to create more accurate test scripts that test what your users are actually doing, not what you guess they’re doing.
Other features and benefits:
• Analyze resource and response time analytics in real time
• Spot performance regressions with continuous integration (CI) support
• Identify network-impacted activities with full network emulation
• Test responsiveness from content delivery networks and other third parties
• Measure performance of latest HTTP/2 and SPA framework technologies
L E A R N M O R E
23 | SOASTA: Performance Is Everything
4. DON’ T FORGET ABOUT MOBILE APP TESTING ON REAL DEVICES
With more than half of all web traffic happening on mobile, you need to ensure your apps and sites are as performant on mobile as they are on desktop. You need automated testing of mobile apps or websites within real devices so that you can measure CPU, memory, battery, and network usage for every app action on each device.
Your mobile app testing tool should integrate with CI tools and device clouds. This allows you to check performance with every new build on as many devices as needed and compare those results with previous builds to locate memory leaks and CPU-, battery-, or network-heavy resources.
Other features and benefits:
• Easily find regressions across different software releases and compare performance of each
• Detect performance variances across multiple devices and operating systems
• Monitor real-time results during and after tests
• Catch issues with UI changes
• Capture true gestures for easy replay during test execution
• Execute parallel tests on multiple devices simultaneously and reuse tests across different devices
• Test your app using devices on your desktop, in the lab, or remotely in device clouds
L E A R N M O R E
24 | SOASTA: Performance Is Everything
You can compete with Amazon
One thing that can’t be stressed enough is that shoppers want to buy from you — especially during the holidays. As you probably already know, conversion rates are historically much higher during the holiday shopping season. Visitors who come to your site are very motivated to check items off their shopping lists.
Offer them a good experience — including secure, reliable, fast performance — and you radically increase the chances that these primed consumers will convert.
25 | SOASTA: Performance Is Everything
The SOASTA Digital Performance Management platform gives online retailers a crystal-clear view of the relationship between revenue, user experience, and IT performance.
SOASTA DPM provides the contextual intelligence you need to perform at your best. Spend less time seeking performance intelligence and more time putting it to work. The SOASTA DPM platform is a comprehensive solution set that includes:
• mPulse™ for real user measurement (RUM)
• DataScience for deep data analytics
• CloudTest® for continuous load testing
• TouchTest™ for mobile test automation
• Digital Operations Center (DOC™) for a unified view of digital performance
• Professional Services for expertise in installing, configuring, and optimizing your entire DPM platform, from measurement and testing through to data science analytics (available either as consultants or embedded within your company)
This complete platform supports your digital transformation with end-to-end visibility and intelligence to continuously measure, test, and optimize online performance in production, in real time, and at scale.
L E A R N M O R E
soasta.com | Contact Us
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