How to be Ready When Large Scale Customers Hit Your Site as a Result of Successful Marketing Campaigns

Editor's Notes

1. Tom Kiing is the GM of Australia’s largest online mall Tarazz.com.au which offers a seamless, local shopping experience accessing global brands not previously available here in Australia, such as Walmart and Sephora. Offering 1 million SKUs already, the Tarazz business is a classic example of the rapid growth that can be achieved in online retail.
2. Who pays RRP anymore?Black FridayU.S. consumers spent a record $1.042 billion online on Black Friday, a 26% increase over the same day in 2011Click Frenzy2 Million visitors to the Click Frenzy site November 2012Chinese 11/11Alibaba subsidiaries Taobao and T-mall  sold $3.06 billion in product in a single 24-hour periodFlash Sales vs Normal DayClick Frenzy 2012 generated a 200% increase in revenue for many retailers involved (eWay)$1.5M worth of goods transacted through local payment gateway during 24 hour Click Frenzy (eWay) “1,000 Recordings to Hear Before You Die” was selling, on average, less than one e-book a day on Amazon. After it was listed as a Kindle Daily Deal last year, it sold 10,000 copies in less than 24 hours (NY Times)
3. Correlation between page load and abandonmentThere has been an established link between slow page loads and decreased conversions on e-commerce sites. According to a survey by Akamai, 83% of users expect a page to take maximum 3 seconds to load with 40% leaving if it takes more than 3 seconds.Cost of page loadAmazon's calculated that a page load slowdown of just one second could cost it $1.6 billion in sales each year. Google has calculated that by slowing its search results by just four tenths of a second they could lose 8 million searches per day--meaning they'd serve up many millions fewer online advertsWalmart StudyFor every 1 second of improvement, they experienced up to a 2% increase in conversions For every 100ms of improvement, they grew incremental revenue by up to 1%.
4. Click Frenzy 2012 analysis Winners: see table >Losers: worst performers some of Australia’s most recognised and ‘successful’ RetailersCommon elements to their success/failureSuccessful sites: websites that used AWS & Akamai CDN Fail sites: Sites that were unable to scale to meet demand. Some e-commerce sites were on shared hosting
5. JR: How did you make the idea a reality?TK: We approached Australia Post, who as the incumbent and dominant logistics provider had the scale and reach required. I pitched the venture as way to get additional cross border traffic into Australia. We then visited the US to talk to whole bunch of brands.JR:Considering the scale of some of the brands already, what was in it for them?TK: It makes it easy for them to access new markets without the hassle of having to manage overseas shipments.
6. JR: So that was your supply and logistics arranged, how did you approach creating the User Experience?TK: You initially build your prototype before taking it to market and then refining. This initial stage is normally achieved by building a team in-house. You then refine the platform further – by getting outside expertise through partnerships.
7. TK: It’s important to gain clarity of your requirements – in particular the capabilities and scale – and then have both the internal capabilities and the right partners to meet them.
8. JR: Was the much focus on the look and feel?TK: The Tarazz business is big and complex – so getting the back end right was the initial focus. There are many winning businesses out there that don’t have great user experience, but have the right offer. Think of discount airlines for example.
9. JR: I’m assuming that a large proportion of the audience here are people trying to build or grow online businesses - what insights can you offer them about User Experience?TK: Turning an existing bricks and mortar business online is a different user experience to pure play. You are really encoding your DNA into your digital platform. The prime opportunities for bricks and mortar business to compete online are if they can repeat the DNA and experience.For Pure play ecommerce it’s different, as you are creating a new user experience. In fact there are opportunities to exploit the lack of speed for traditional businesses to occupy their online spaces. Think about how Carsguide.com and Realestate.comdisrupted the newspaper classified market.
10. JR:So tell us about the first campaign?TK: It was really all by accident. We had a soft launch with just a splash page and some emails that were followed by some media people. Before we knew it we were they were given a few hours’ notice that they we were going to be featured on A Current Affair.
11. TK: Our site crashed half way through the segment.
12. JR: So, with all the planning and business savvy you used to get running, why did you overlook the need for a scalable site?TK: We underestimated the amount of traffic a TV program generates. We had been led to believe that the “cloud” was infinitely scalable.
13. JR: What was the impact of that initial experience. Did it make you question your plan?TK: Yes. We went back to the drawing board and reviewed the main components – traffic, offer and processes.
14. TK: We proved we could generate the traffic, we knew that the offer was good, but some of the processes such as processing and categorising feeds from retailers, tracking products during the shipping, payments, customer tracking did not have the performance or scale to support the volumes.We realised that we needed to go the next level of partnerships, so we reached out to MIT who we had experience in the scale necessary.
15. JR: And that’s where we profiled your platform. A lot of people think that you just need to throw more infrastructure at your site and it can cope with any load. However, the software platforms themselves often have limits and that’s often what breaks first under extreme loads. Application profiling runs load, performance and stress tests across the entire to identify exactly where performance and scale bottlenecks are in the hardware, code and content so they can be addressed.
16. JR: So, after we profiled and you fixed your platform, what was your 2nd experience?TK: It was much more positive. We were more prepared, the site stayed up, and we got thousands of signups.
17. JR: In summary, what are the main points the audience here can learn from your experience?TK: The old ways of starting things on a smell of an oily rag are just not sustainable, as if you burn the customer once you’ve lost them forever.TK: Online retail is no longer embryonic – it’s become quite sophisticated. To be successful you have to be serious about your approach.TK: Online customers will benchmark you against the incumbents – and in the borderless world of ecommerce you are being benchmarked against the Amazons and Macy’s of the world. Amazon is a 200 billion company with over 10 years’ experience at selling online.TK: For a bricks and mortar retailer moving online, it’s not just about creating a web shop – you need a online team to manage SEO, content, feeds etc. You also need the right partners who understand online business and the performance and scale required.
18. TK: Finally, if you see a model today and are looking to replicate it – you are too late. You need to be thinking of the models that will work for the next 3 years.