*By Bob Wambach, Vice President of Product Portfolio, Dynatrace
Retail supply chains are becoming increasingly complex and susceptible to disruption, while rising global inflation impacts retailers’ costs and changes consumers’ purchasing behavior. In this industry, no two years are the same, and the same can be said for one of the most predictable periods of the calendar: the holiday shopping rush.
The months of October to December have for decades represented a major revenue-generating opportunity, which is why they are often referred to as the “golden quarter”. This period includes increasingly global events such as Black Friday and Cyber Monday, as well as the December festivities and sales that extend into the New Year. This is a time when demand increases significantly, and one that online retailers need to be able to cope with and take full advantage of.
However, as consumers affected by cost-of-living changes adopt a more conservative approach to how they spend their money, retailers are being asked to level up their operations through data intelligence. Those who can harness the vast volume of purchasing information will be able to deliver more accurate and personalized service, demonstrating value and influencing the changing behavior of conservative shoppers.
What to expect from the golden quarter of 2024?
If there’s one thing that’s certain about the 2024 holiday shopping season, it’s that IT and data infrastructure will be essential to harnessing the surge in demand and converting it into sales. In recent years, there’s been a trend toward smoothing out peaks in activity during specific promotional events like Black Friday, as they’re no longer concentrated on a single day, but instead stretch out over weeks and months, allowing for greater competitive advantage.
Consumers are increasingly relying on online channels to decide what and where to buy, searching through the many options available. While retailers’ technological concerns used to be focused solely on preparing for and maintaining operations during short-term peaks in traffic, activity is now less predictable. The extended holiday sales period requires not only resilience, but also intelligence, analysis of customer journeys and adaptation of strategies.
Setting yourself up for success
Retailers need to prepare their systems to handle high traffic intensity and the unpredictability of when peaks will occur. When problems are observed and services are impacted during a period of high traffic, time is money: companies cannot make their teams available for several days trying to identify and fix faults. It is essential that they implement real-time monitoring, simulating user behavior and testing traffic capacity in advance, ensuring greater confidence in the ability to overcome occurrences that may arise.
In this scenario, monitoring and observability powered by Generative Artificial Intelligence (AI) has proven valuable in e-commerce environments. Complex IT systems can no longer be managed by humans alone, making AI implementation imperative to prevent or resolve incidents before they impact the customer or to provide the root cause, context and solution of anomalies to the IT team so that resolution can occur in near real-time.
Data-Driven Insights: What Makes Winners Different
In some ways, the holiday shopping rush is a high-intensity microcosm of consumer behavior throughout the year. However, when it comes to non-essential spending, a targeted and strategic approach is key. The average cart abandonment rate is 66.5%, according to data from OptiMonk and Conversific. It’s becoming harder to convert sales, while it’s also becoming easier to lose them.
By investing in IT observability, retailers can better prepare to take advantage of the golden quarter. Every click, tap, or swipe across the customer journey tells a story. Retailers can visually capture and replay a complete digital experience for each user, identifying the friction points that cause cart abandonment. Perhaps pages are difficult to navigate, mobile users are responding differently to certain promotions, or certain payment options are causing unnecessary friction. This level of granular insight will differentiate the winners, enabling them to deliver the most proactive, seamless, and accurate digital experience to convert sales.
With a wealth of sales and customer experience data at their fingertips, retailers who invest in extracting insights and answers from this information will be the ones who reap the biggest rewards this shopping season and beyond.
*Bob Wambach, Vice President of Product Portfolio, Dynatrace
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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