E-tailers to face 'staggering losses', study finds

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By: Wise Marketer Staff |

Posted on October 15, 2003

E-tailers to face 'staggering losses', study finds

Lost and incomplete web shopping transactions, when monitored accurately, are revealing 'staggering losses' of sales revenue for online retailers, and yet more weaknesses in transaction performance may be around the corner, according to internet performance monitor, Keynote Systems.

The first six weeks of data from Keynote's new Consumer e-Commerce Transaction Index (CETI) revealed inconsistencies and weaknesses in transaction performance among the index members. Results from the index show dramatically varying web transaction performance and response times, leading to the failure - at times - of almost 30% of the transactions measured.

With online retail sales for 2002 totalling US$93.1 billion (as reported by the Dieringer Research Group), and online retail sales for the 2003 holiday season being forecast to increase to US$20.4 billion from US$12.6 billion in 2002 (as reported by Brand Keys), the lost and incomplete transactions are worrying for large retailers.

Millions lost "In the dog-eat-dog retail space, a competitor is truly only a click away," explained Carol Carpenter, director of product management for Keynote. "If almost 30% of transactions fail, that could easily translate into tens of millions of dollars in lost revenue."

Although online retailers generally recognise the need to benchmark and monitor customer facing web-based applications from the end user's perspective, this latest assessment highlights the need for retailers to regularly 'load test' their online channels, especially at busy times of the year such as the holiday season.

The e-leader Keynote's proprietary E-commerce Transaction Index measures the response time and success rate for executing a typical six-page online retail transaction, across 13 leading retail web sites, including Eddie Bauer, Office Depot, Walmart, JC Penney, Nordstrom, Target, eBay, Sears, Costco, Amazon, Best Buy, Office Max, and LL Bean.

Eddie Bauer led the index ranking, in both response time and success rate, for five out of the six weeks from August 11th, 2003. The lowest ranking sites in the index recorded a response time of 40.84 seconds, and a success rate of only 71.75% (a loss only slightly short of 30% of attempted transactions).

About the index The companies monitored by the index were chosen as being some of the most active e-tailers, receiving a significant majority of their revenue from online sales. As such they provide a benchmark against which other online retailers can measure their own performance.

Performance (response time) is defined by Keynote as the average number of seconds taken to complete a multi-step transaction, including accessing the web site's home page, searching for a product, viewing the product, adding the product to a shopping cart, proceeding to the check-out, and logging in to an account to make the purchase.

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