November 29, 2005
E-Commerce Giants Fare Well on Black Monday, but ...
By Evan Schuman, Ziff Davis Internet
News Analysis: Web site activity that means nothing to an accountant is still a concern for an IT manager: A site visitor takes up just as much bandwidth whether a purchase is made or not.
Major retailers were given a teaspoon of good news Monday that their sites fared well during what was expected to be a super-intense traffic day.
But the real wave of intense traffic may hit in late December, so the strong Black Monday performance may prove to be a brief-lived cause for celebration.
In the history of retail, the Friday after Thanksgiving has come to be known as Black Friday because it is supposed to be the day that retailers' balance sheets turn profitable (go into the black).
More recently, though, an e-commerce version has arrived: Black Monday.
The Monday after Thanksgiving is when e-commerce sites are supposed to become profitable because that's when consumers return to work and start using their employers' broadband connection to do some shopping. (Goodbye, productivity. Hello, Amazon.)
This year, though, some industry observers are predicting that the true rush of e-purchases will hit in late December. If true, this could impact how retail IT execs look at load-balancing and what kind of traffic they should prepare for and when.
Ernst & Young, for example, is predicting the rush of traffic that typically hits right after Thanksgiving will now happen in "the days immediately preceding Christmas, Dec. 24 in particular."
"Consumers likely will delay shopping to take advantage of sales promotions as the holidays approach," said Jay McIntosh, Americas director of Retail and Consumer Products at Ernst & Young LLP, in a statement issued by the accounting and consulting firm.
"This year, because of higher energy costs, many retailers started promotions early before home heating bills hit in November and December," McIntosh said. "As always, consumers are hungry for bargains, and savvy shoppers will find them, particularly in toys, apparel and consumer electronics."
Keynote Systems has tracked Web site performance trends for years, and it has begun releasing its holiday e-commerce report cards. Thus far, the major retailers have gotten an "A" for effort.
"The main sites—Amazon and the like—are doing pretty well as of today," Roopak Patel, Keynote's senior Internet analyst, said in a Monday evening interview.
The only problems Keynote saw were from Best Buy on Friday afternoon, when the retailer's site's "availability dropped below 25 percent" between 9 a.m. and 2 p.m. ET.
Best Buy officials wouldn't tell Keynote what went wrong, Patel said, but it appeared to be a system crash of some kind.
"With reasonable confidence, I can say that it was not an Internet-wide phenomena," he said. "We know they had a problem."
Other than that one incident, Patel said the major retailers—including Amazon, Best Buy, Costco, Target and Wal-Mart—fared quite well.
Even the trouble spot of checkout didn't trip up any of the major retailers this weekend. "Checkout doesn't seem to be a problem this year," Patel said.
But Patel urges Web site administrators to be cautious and not celebrate yet, as he buys into the theory that the big wave this year is still weeks away.
"Users are waiting until the last minute. You will see a lot of promotion," he said. "It's too early this season to tell whether they've escaped unscathed. It's not time to start celebrating. They need to keep their guard up. The real Black Monday could be further down the road."
It is not yet known whether IT executives will be visited at midnight on Dec. 23 by the Ghost of Traffic Surges Yet to Come.
The reason for that uncertainty lies within definitions. When Patel refers to Black Monday, he's speaking as an IT consultant and is referring to the tidal wave of traffic. But when Ernst & Young refers to Black Monday, it's speaking as an accounting firm and is concerned only with profit/loss issues.
The distinction? The IT view counts visitors when they come and take up bandwidth, no matter what they do. The accounting view only cares when they buy something.
That means that the financial Black Monday (when lots of sales happen) could indeed happen in late December, but the traffic might have already hit its height in late November.
Is it possible that the anticipated surge of late December purchases will come from the tire-kicking site visitors back in Thanksgiving leftover mode? Patel said that he thinks it is.
Consumers "were not spending this past weekend. They were coming to check for real-time inventory, to see availability at the nearest store," Patel said. "You're seeing a maturing of the market. They are coming to the sites and not spending."