What is e-commerce scalability and why is it important in 2022?
With the ever-changing customer demands in today's digital world, e-commerce scalability is more important now than ever before.
According to Google, when your website takes up to 5 seconds to load, there’s a 90% chance your prospective customers will ‘bounce’ and go to a competitor instead. This underlines just how essential the customer experience is to online retail. If your online retail business experiences a sudden surge in demand and your online infrastructure can’t cope, you will lose sales. Every step your business takes toward e-commerce growth should put the customer experience first and foremost, and that’s why scalability is absolutely crucial to your long-term success.
This year, e-commerce sales will account for more than 18% of sales worldwide. By 2023, analysts predict that online retail will account for almost a quarter of all global sales. These staggering figures were no doubt accelerated by the pandemic, which has forced many people to shop online for goods and services that they would otherwise access in-store.
In many ways, the events of 2020 acted as a trial run for how retail businesses might cope with a surge in online demand. For some, it was a baptism of fire and they’re still struggling to adapt. For others, it was simply a case of scaling up their digital operations to cope with the sharp rise in traffic. These businesses succeeded because scalability was at the heart of their digital transformation strategy, making them more adaptable, agile and resilient.
Preparing for anything with a scalable e-commerce solution
All retail businesses share a common goal: growth. Nobody starts a retail business with a plan to maintain the status quo and break even year-over-year. It’s a game of profit. And that means being able to take advantage of environmental factors that work in your favor, as well as being able to mitigate against external events that might catch you off guard.
In 2018, Amazon launched ‘Prime Day’ to engage its 100 million Prime members with targeted deals and massive discounts. However, Amazon’s website couldn’t handle the surge in online traffic and at peak volumes, just a few minutes into the sale, they encountered a major issue. This left desktop, mobile and in-app users unable to checkout with their purchases, simply redirecting them to the homepage. Estimated to have cost Amazon more than $1 million per minute, it’s a hard-learned lesson in scalability, and it’s something small businesses can learn from.
While Amazon’s situation was very much self-inflicted, there are plenty of environmental factors (such as pandemics) that can lead to unpredictable consumer behavior. Whether or not these changes in behavior are good for your retail businesses, very much depends on your preparedness - or rather your scalability.
Planning for e-commerce growth before it occurs
Even a moderately successful e-commerce operation will grow year-over-year. The trick to scalability is ensuring that as you increase your capacity to accommodate for increased web traffic and order fulfillment, you don’t leave behind the things that made your brand successful to begin with. That means thinking about scalability before it even needs to occur. You want to know that in one year or five years from now, you’re going to be able to fill twice or three times as many orders as you are currently, without running into any issues. You need to avoid downtime, preserve the customer experience, and ensure deliveries go out on time at all costs. Just one slip up in any of these areas can cause prospective customers to jump ship and go to one of the dozens of competitors that likely popped up in the same Google search that led them to you.
All of this means you need to be ready to scale your software for order fulfillment, accounting and warehouse management, and any CRM (customer relationship management) tools and ERP (enterprise resource planning) suites that you might employ. And this is only the back-end of your retail operation. On the front-end, you have to think about the customer experience. This includes changes to your website, new features and functions, adding new products and content - all of this will need to scale up at the same time without running the risk of troublesome downtime that could upset loyal customers.
How many Prime members and sales did Amazon run the risk of losing when they were unable to checkout and take advantage of deals that were marketed directly to them? Scalability matters.
Finding a scalable e-commerce solution
In order for your business to be truly scalable, you need to be thinking one step ahead. That’s why development architectures like headless commerce have gained so much attention recently. Headless commerce might sound intimidating, but the idea behind it really is quite simple.
A headless architecture refers to the decoupling of the front-end of your business (your website and other customer-facing elements), from the back-end of your business (the behind-the-scenes operations like payment systems, CRM tools etc.). In a nutshell, this allows you to plug in new functionality to the back-end without disrupting the user experience, allowing you to scale your business effortlessly. Learn more about the benefits of a headless commerce strategy here.
Headless solutions also tend to be cloud-based by their very nature, so you’ll have no need for physical server space and will benefit from automatic performance and security updates at no additional cost. What’s more, future customer touch-points that enhance the experience - such as mobile apps, the addition of sister websites, or even the incorporation of voice commerce - can be integrated seamlessly into your current setup. That means not only are you scaling for volume, but also capability and access.
Analysts and think tanks are already talking about how the COVID-19 pandemic has “changed retail forever” with more and more people choosing to shop online permanently as part of the so-called ‘new normal’. If your business isn’t already looking at scalability as a top priority, it isn’t too late to start preparing to take advantage of this change in consumer habits. Remember, 83% of consumers say they are less likely to re-purchase from an online retailer following a negative website, shipping or delivery experience. Make sure you scale early, and scale smart.
To learn more about e-commerce scalability and how Emporix can help your business prepare for long-term growth, get in touch today.