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Strategising For Spikes

Strategising for spikes in your online business is really important yet, astonishingly, many organizations are still not doing it effectively. I believe that ineffective preparation for online spikes is inexcusable with the technology available today.

Since I’m based in Australia, I’ll focus mainly on some examples of Australian companies whose websites collapsed under the weight of increased traffic due to the lack of a proper plan; but these examples are applicable anywhere in the world. Traffic spikes know no international boundaries or borders.

On December 26, 2013, on one of Australia’s biggest shopping days of the year, the online retail capability of one of Australia’s largest department stores crashed. Although the CEO initially quelled customer and analyst concerns by assuring them that the online service would resume within a matter of hours, it took eight days for the department store’s online retail platform to get back online. In the aftermath of the event, the executive ranks of the department store and industry analysts concluded that the outage would not affect the store’s sales and profit since online sales only accounted for about 1 percent of their total sales for the store.

That conclusion completely misses the point. Market analysts estimate that in 2013 Australians spent $2.9 billion in department stores globally during post-Christmas sales. I know that my personal contribution to that total went to. Department store leaders like Nordstrom in the US and John Lewis in UK are now pushing more than 25 percent of their total sales through the online channel. These overseas department stores offer online shopping services that are easy to navigate, responsive and they are backed by great service. The main point for the Australian department store that suffered the extended outage during the post-Christmas rush in 2013 is that it missed an enormous opportunity. With effective planning and a strong online retail offering, the store could have made a real and positive difference to their sales and profit.

Yet their reaction was symptomatic of many large Australian organisations that still think about IT only when something doesn’t work. On the flipside, they should focus on the benefits that technology can generate for their businesses.

Ineffective planning for online spikes does not only affect “bricks and mortar” retailers. In the US, Cyber Monday has become an annual event during which Americans flock online to grab a post-Thanksgiving bargain. Adobe estimated that Americans spent $2.3billion online on Cyber Monday in 2013 – that is more than the entire annual Gross Domestic Product of the Central African Republic. In the US on Cyber Monday 2013, online shoe retailer finishline.com suffered a website outage and reported a $3 million negative impact on sales. They may have taken solace that one of their main “bricks and mortar” retail competitors suffered a website outage exactly 12 months earlier.

These issues are not limited to retailers and online businesses. In October 2013, as bushfires raged throughout outer Sydney and Blue Mountains, the New South Wales Rural Fire Services suffered intermittent website outages due to extremely high levels of traffic. Without a reliable website for updates, people rushed to the NSWRFS call center and call hold times skyrocketed. I can’t imagine the frustration of waiting on hold during such an emergency. The NSWRFS pleaded with people to follow their Twitter and Facebook sites for updates. When this emergency situation had subsided, I wonder if anyone stopped to think why Twitter and Facebook can handle spikes in traffic so much more effectively?

So, should it be possible for all organisations to plan effectively to handle unexpected and expected spikes in online traffic? The answer is YES. Rackspace does it with our customers every day – in Australia and elsewhere. We helped one of Australia’s most high profile sporting bodies plan to cope with spikes in website traffic during its biggest day of the year. It helped them avoid the website outages that had plagued this annual event for several years prior to joining with Rackspace. We have helped online retailers prepare for massive promotional events. We have helped one of Australia’s largest consumer goods manufacturers plan and executive an annual marketing campaign that led to huge and short term demands on their web presence and IT systems.

Yet effective strategising for spikes takes knowledge, diligence and comprehensive preparation and testing. Consider this – on Cyber Monday, the peak time for website traffic is between 8 p.m. and 9 p.m. And this happens on a day when most people who work in corporate IT are on holiday with the family and thinking more about their next Turkey drumstick, rather than the availability of their company’s website. This is not the most convenient time for an online traffic spike is it? Oh, by the way, 20 percent of online shoppers are accessing online retail sites via mobile devices…so don’t forget about this either!

If you would like to discuss how your organisation can plan for online spikes, come and talk to the team at Rackspace. We love helping our customers to use technology in a way that maximises the positive impact on their business or organisation. This expertise is all part of our famous Fanatical Support and we are proud to offer this to businesses and organisations worldwide – in Australia and beyond.

About the Author

This is a post written and contributed by Angus Dorney.

Angus is Director and General Manager for Rackspace in Australia and New Zealand. Based in Sydney, he is responsible for driving Rackspace’s growth in the region and establishing local teams to ensure that Australian and New Zealand customers receive Rackspace’s famous Fanatical Support. Prior to this role, Angus was Rackspace’s Director of Operations for Australia and New Zealand. During this time, he played an important part in setting up operational aspects of Rackspace’s local business to support future growth and also in coordinating teams to ensure a successful build and launch of the Rackspace Open Cloud in Australia.

Angus brings a unique mix of General Management, Technology and Strategic skills to Rackspace. He has worked in a variety of different management, operational, strategy, sales and marketing roles in Australia and overseas. Angus spent five years at EDS, including two years at the corporate headquarters in Plano, Texas. In his time at EDS, Angus was involved in a variety of major sales pursuits and he also played important roles in some high profile operations improvement programs. It was his experiences at EDS that gave Angus a love for technology and its role in driving positive transformation in businesses and society.

After EDS, he joined Blue Star Group as Group General Manager for Strategy. In this role, Angus was an integral part of an Executive and Technology team which designed and implemented a radical new set of digital workflows to automate the manufacturing processes of traditional print manufacturing facilities. Angus moved on to become General Manager of NSW and Queensland print business units for Blue Star. Prior to joining Blue Star, Angus had also worked at ATKearney and Tate & Lyle. In each of these roles, Angus took particular interest in technology-led business transformation projects.

Outside of work, Angus is a passionate support of Indigenous Australian education, reconciliation and advancement through his Directorship at Career Trackers. He is also a Vice President of Sydney University Rugby Club. Angus holds a MBA from London Business School and Bachelor of Commerce/Law from University of Sydney.


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