With Christmas a few days away, many of us are now finally starting to get into the festive spirit, but for most high street shops and online retailers, preparations started months ago. Not only have they had to prepare their stock and take on extra staff to maintain service levels during the Christmas period, but they have also had to prepare their IT infrastructure for the busiest time of the year.
For most “brick and mortar” stores, around 30 to 60 percent of their business revenue is executed in the four to five weeks leading up to Christmas. This puts massive pressure on the IT systems used to process transactions, manage stock and provide customer support. In order to deal with the abrupt spike in demand, retailers are increasingly turning to cloud and managed hosting providers, where they can buy scalable capacity.
One such company is Lumison, a provider of private cloud, Infrastructure as a Service (IaaS), managed hosting and colocation across its nine UK data centres. Techworld spoke to the company's chief technology officer Matt Lovell, to find out how its retail customers have been preparing for the Christmas rush.
“The last thing you want to be doing as a retail customer is worrying about whether or not you've got sufficient capacity to manage that 30 to 60 percent, in terms of understanding how the systems are going to perform, and whether the applications are going to be available and provide a high level response time,” said Lovell. “So it's working with those customers to help them understand what the IT systems need to scale to in order to deliver that business outcome, and the vast majority of retailers have welcomed that level of support.”
Lovell explained Lumison works with retailers to determine their order processing, what stock levels they've got and what they're hoping to sell. “We equate that in terms of transaction volumes and look at whether or not the current level of the systems and the capacity will support that, if they executed and sold everything,” he said.
Lumison also looks at peak level activity, and advises customers on how much extra capacity they are likely to need in order to support these high transaction volumes. “It's creating a configurable service for the customer,” said Lovell. “We're moving beyond a standard cloud proposition. There are elements that you can configure; we've got the ability to scale this up, scale this down for you; and then there's also the customised element, which are specific to the majority of those customers.”
It is not just high street stores that are under increased pressure during the Christmas period. A recent survey of global shopping habits by KPMG suggested that UK shoppers are embracing technology at a faster pace than many other countries, with 77 percent of British shoppers preferring to buy goods like CDs, DVDs, books and video games online.
If anything, online retailers have more at stake if their systems fail and transactions cannot be processed, as there is no cash option to fall back on. And customers are not just placing orders by email, but over the phone, via web chat or even social media on their smartphones, putting enormous pressure on online retailers to provide a consistent level of service.
For example, on 5 December – so-called “Cyber Monday” – around 12 percent of all online purchases were made via mobile, according to information management company Stibo Systems, but satisfaction with mobile websites remains low, with only 27 percent of consumers were satisfied with their mobile retail experience.
Meanwhile, recent Alcatel-Lucent Enterprise research conducted at the Social Media and Customer Services Summit found that only 28 percent of organisations have integrated social media into customer service operations. The company advises retailers to create an integrated multi-channel approach to customer service, treating social media channels and mobile devices as equally important.
John Lewis has been making moves in this direction, with a new web self-service solution from Transversal, which allows customers using johnlewis.com to find relevant information by keying in search terms in everyday language. Answers to common questions are stored in a ‘knowledgebase’ which is continually updated with relevant information on products, services and deals.
“The way consumers shop is changing rapidly,” said Sean O’Connor, website manager for John Lewis. “People want the ease that the internet can provide, and when they shop online they expect convenience - the Transversal solution will help us achieve that.”
But providing good online customer service relies on having a solid infrastructure to support it. One company that has been careful to ensure it has the computing power to handle the increased sales activity over the Christmas shopping season is Amethyst Group, which provides fulfilment services to the online retail arms of high street fashion stores such as New Look, Jane Norman and Burberry.
Amethyst Group announced last month that it was investing in two new IBM POWER7 720 servers to boost processing capacity during the Christmas shopping period, when the company reportedly has to process around three times the normal number of orders. The company was alerted to the need for a server upgrade through Macro 4’s Performance Management software, which provides real-time performance monitoring and assists capacity planning for IBM i servers.
“The performance data from Macro 4 showed that we were using 85 percent of the available CPU capacity on our servers,” said Chris Salkeld, operations manager at Amethyst. “Previously we’d maintained 60 percent CPU consumption and as we were nearing our busiest time of year, it was clear we needed to address the issue and we swiftly made the decision to invest in greater processing power.”
Amethyst operates over 1.2 million square feet of warehousing space, with around 550 employees in six distribution centers. The POWER7s, integrated with Macro 4’s Job Scheduling software, run four times faster than the old servers, and help Amethyst’s operations team manage its workload by automating a wide range of daily, weekly and monthly processes.
“Macro 4’s job scheduler performs a key function for us by helping us define and configure regular jobs to happen automatically,” said Salkeld. “Our business runs 24 hours a day, seven days a week, with hundreds of scheduled jobs occurring each day. These can be essential tasks such as collecting customer order data or sending order confirmations to customers. Some key jobs must happen at a specific time every day without fail – often out of hours – and it would be uneconomic to have someone manually managing each one.”
Amathyst is also using Macro 4’s Print and Output Management solution, which helps ensure that important order information such as pick lists, despatch notes and shipping labels end up at the right printer, in the right warehouse in good time, as well as its Disk Management solution.
Not all retailers are so well prepared, however. According to internet and mobile cloud monitoring company Keynote Systems, British grocery store Sainsbury’s has been struggling to maintain performance levels on its website during peak periods of demand.
At around midday on December 2nd, Sainsbury’s Christmas page was taking an average of 46.10 seconds to load for UK consumers, and less than half of visitors were able to fully load the page, said Keynote. From 9am until 7:30pm, there were long periods of time when Sainbury’s Christmas page was not able to fully load within 60 seconds.
“As there’s a multitude of online retailers that have created bespoke Christmas pages and offers, it’s highly unlikely that customers will continue to try to complete a transaction with one particular retailer if they’re unable to access the site or find the information and products they need,” said said Robert Castley, lead solutions consultant at Keynote Systems. “It’s essential that retailers understand what’s happening on their websites, even monitoring performance on temporary pages, as availability and performance issues can have a huge effect on sales.”
With so much at stake, it is essential for both online and brick-and-mortar stores to make sure their infrastructure is running without glitches at Christmas. The key is to start preparing early, ensure that capacity can be extended at short notice for periods of high demand, and have the backup in place for when things go wrong. It is a delicate balance that retailers need to strike, but one that will make the holiday season a lot less stressful in the long run.
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