Irce 2011 San Diego Final


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How do top IR500 companies quantify the business impact of their online customers’ experience?
How leading retailers optimize customer conversions by ensuring a quality experience.

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  • Key Messages:Impact of performance beyond RT and Availability Proactive vs. ReactiveHolistic/Correlated/Phased approach
  • Key Messages:Target creating new platform – moving off of Amazon after more than a decadeHome Depot significantly reducing the number of stores they are opening yearly and investing in the online spaceMacy’s focusing on “omnichannel” strategy to engage customers in stores, internet and mobile channelsBest Buy reducing capital expenditures (Stores) and increasing investment in online channel with a goal of hitting $4b in online revenue
  • Key Messages:Belk launched a $150m ecommerce initiative last year because of the growth and margins in that channelWilliams-Sonoma spending $50m on ecommerce and supply chain because it is their fastest growing channelMen’s Wearhouse – recognized they were late to the game in the online and social channels – won’t happen again because George is going to guarantee it!Ann Inc. spending $25m improving ecommerce infrastructure including a redesigned web site, mobile commerce site and more international web stores
  • Key Messages:Even though the online/mobile and social channels are getting a lot of attention, key metrics have not moved that much over the last ten yearsConversion rates have shown some growth but so has cart abandonmentIn addition, repeat customers (Loyalty) trends are indicating that every visit/order has to be earned
  • Key Messages:Dynamic Phase – utilizing customer/previous visit information to customize the visit for the customerOnline is now more than the website accessed from a PCThere are currently 5 devices, 6 channels, and the entire customer lifecycle to consider
  • Key Messages:Navigation/Click Stream Paths can be varied based on the customer, what site they came from and other variables (location)Content can also be varied based on the customer, where they came from and other variables (seasonality)
  • Key Messages:Resorting of site search results to best meet the customers needsProduct Recommendations that can be customized to custom to where they came from, what they have searched for, as well as many other optionsChat sessions customized to customer/website
  • Key Messages:Leveraging all of the data that is collected by Gomez customers key insights can be gleanedPage abandonment varies by page type – visitors are more patient on check out page than home or search results pageOn average abandonment rate increases significantly as page load times increase
  • Key Messages:Mobile users are a little more patient initially but after 2 seconds their abandonment rate mirrors that seen on websites
  • Key Messages;For purposes of consistency across many retailers the conversion just goes through search results“Conversion Rate” begins to drop quickly after 1.5 – 2 seconds of load time
  • Key themes:Gomez helps you prioritize problems based on business impact and rapidly identify the root cause to resolve the issueTalk trackBecause you have this unified view across the entire ADC, when a problem occurs Gomez lets you do two things very quickly:Determine the business impact of the problem so you can prioritize. <click to animate> Gomez dashboards let you rapidly determine how many users are affected, what transactions are affected, etc. so you can determine how urgent and critical the issue is. Once you’ve determined how urgent the problem is, your next question is: what is the root cause of the problem?<click to animate>Gomez also helps you answer this question<click to animate>2. Isolate the root cause. Gomez dashboards allow you to quickly determine if the problem is in one of four major categories, and then drill down into each category to determine the specific root of the problem.Is it in your data center or WAN? Where in your data center? A server? A network segment? A method call? Is it with an ISP or the Internet? Is it a problem that everyone else on the internet is experiencing, or just you?Is it with a third party provider? Is it a cloud provider? A CDN? A third party data feed? Etc.Is it in a browser or device? Is your application incompatible with a browser or particular mobile device? Are your pages too big? Too many objects? Etc.This information lets you quickly prioritize problems and speed resolution.
  • Key Messages:Business expectations of the online channels is highCustomer expectations of online channels always increasingResources are stretchedThere are many ways to look at customer experience
  • Key Messages:If you have a PDP add to cart test all real customer PDP add to cart transactions are trackedMeasures time spent in the data center as well as in the internetQuantifies business impacts by tracking and displaying the real customers impacted by a performance issue
  • Key Messages:Impact of performance beyond RT and Availability - focus IT/Business resources on issues impacting customers the mostProactive vs. Reactive – Move from the “Doing Autopsies” to “Preventative Medicine”Holistic/Correlated/Phased approach – eliminate the time and complexity from a plethora of un-collated tools – single E2E tool
  • Irce 2011 San Diego Final

    1. 1.
    2. 2. Quantifying and Proactively Reducing Negative Business Impact due to Performance Issues<br />Steve Trimbo<br />
    3. 3. Topics<br />Online Channels Increasing in Business Strategic Importance<br />Increasing Complexities in Capabilities being Delivered<br />Impact of Performance on Business<br />Taking a Proactive Approach<br />Summary<br />Q & A Time<br />
    4. 4. Online Channels Increasing in Business Strategic Importance<br />
    5. 5. The retailer is taking control of, and overhauling its website, which has been run by Inc. for the last decade.<br />Traditional retailers making strategic bets in the online channels<br />Typically opens up to 200 stores worldwide per year, this year expects to add fewer than 10. Meanwhile, the big home improvement chain has embarked on a three-year plan to invest $1.1 billion in its supply chain and in technology, with much of that budget earmarked for the web.<br />Macy's, Inc. continued to develop and expand its online capabilities in 2010 to accommodate future growth. This investment is part of the company's omnichannel strategy, which integrates the offerings in stores, the Internet and mobile technologies<br />Plans to shave off $70 million to $80 million in capital expenditures over the next three to five years by reducing its bricks-and-mortar square footage by 10%. Meanwhile, it expects to double its web sales to $4 billion in the next 5 years.<br />
    6. 6. Traditional retailers making strategic bets in the online channels<br />Launched last year a $150 million e-commerce investment initiative. "Our margins are so much higher online, that's why it's such a growth area for us," says Ivy Chin, head of e-commerce<br />Projects $135 million to $150 million in capital expenditures in 2011—one-third of that for e-commerce and the supply chain that supports it. "The Internet is our fastest-growing channel and a key component of our future strategy," CEO Laura Alber says<br />In 2011 Ann will spend $25 million on improving its information technology and e-commerce infrastructure with a redesigned web site, a mobile commerce site and more international web stores, says CEO Kay Krill <br />"Our e-commerce site traffic and business is surging," Zimmer told Wall Street analysts at the time. "As a technology Luddite, I accept responsibility for the lateness in aggressively entering into Internet marketing and social networking. It will not happen again."<br />
    7. 7. But - Site metrics continue to be challenged<br />Source: Forrester and Shop.Org State of Retailing Online Studies <br />
    8. 8. Increasing Complexity in Capabilities Being Delivered<br />
    9. 9. Delivering complex capabilities<br />According to Forrester we’re in the “Dynamic Phase” of site optimization<br /><ul><li>Not only are we optimizing the site – we have other online channels to grow and optimize as well:</li></li></ul><li>Tactics Varied and Complex<br />Varied Navigation and Click Stream Paths<br />Optimized Content<br />
    10. 10. Tactics Varied and Complex<br />Resorting of Site Search<br />Different looks of Chat<br />Product Recommendations<br />
    11. 11. Impact of Performance on Business<br />
    12. 12. Website performance impacts visitor behavior<br />Abandonment Rate Across 200+ Sites / 177+ Million Page Views over 1 week / All Browsers<br />Source: Gomez real user monitoring<br />
    13. 13. Web & Mobile Performance Impacts Visitor Behavior<br />Abandonment Rate Across 200+ Sites / 177+ Million Page Views over 1 week / All Browsers vs. iPhone Safari<br />Source: Gomez real user monitoring<br />
    14. 14. Website Performance Impacts Business Results<br />Transaction Conversion* Rate Over Load Time Across 33 Major North American Retailers<br />* Conversion rate computed from home page through search results<br />Source: Gomez real user monitoring<br />
    15. 15. Why Web Performance Matters<br />Average impact of 1 second delay in response time for Web users<br />Customer Satisfaction<br />Page Views<br />Conversions<br /><ul><li>Lost revenues*
    16. 16. Brand damage
    17. 17. More support calls
    18. 18. Increase costs
    19. 19. LOB dissatisfaction with IT</li></ul>*Online business doing $100K/day = $2.5M/year in lost revenue<br />Source: Aberdeen Group - 2009<br />
    20. 20. Why Web Performance Matters: Impact of Poor Performance<br />2<br />4.3<br />%<br />second slowdown<br />reductionin revenue/user*<br />found that a<br />400<br />0.59<br />%<br />determined that a<br />milliseconddelay <br />fewer searches/user*<br />Source: Steve Souders @ VelocityConference 2009<br /><br />
    21. 21. Why Web Performance Matters: Benefits of Good Performance<br />reduced page load times from ~7 seconds to ~2 seconds<br />increase in revenue<br />reduction in hardware costs*<br />Reduced landing page load time by 2.2 seconds<br />60 M<br />increase in conversions<br />More downloads/year<br />50<br />%<br />users that visit the fastest pages<br />50<br />more pages/visit than users visiting the slowest page*<br />view<br />%<br />7–12<br />15.4<br />%<br />%<br />Source: Steve Souders @ VelocityConference 2009<br /><br />
    22. 22. Taking a Proactive Approach<br />
    23. 23. Challenge 1:Pinpointing Problems and Optimizing Performance<br />2. Where is the root cause?<br />1. What is the business impact?<br />Customers<br />Cloud <br />Private Public<br />Data Center<br />Local<br />ISP<br />Virtual/Physical Environment<br />3rd Party/Cloud Services<br />Web Servers<br />App Servers<br />DB Servers<br />Load Balancers<br />Browsers <br />Mainframe<br />Storage<br />MajorISP<br />Content Delivery Networks<br />WANOptimization<br />Web Services<br />Mobile Components<br />Mobile Carrier<br />Employees <br />Network<br />Employees<br />Devices<br />
    24. 24. Challenge 2:The Application Performance Delivery Chain<br />The Application Delivery Chain:<br />Customer Experience<br />More and Diverse <br />Customers<br />More Customers<br />Customers<br />Internet<br />Data Center<br />Virtual/Physical Environment<br />App Tier<br />DB Tier<br />Web Tier<br />Mainframe<br />CDNs<br />Load Balancer<br />CDNs<br />MajorISP<br />Ad <br />Providers<br />Content<br />Storage<br />Network<br />Employees<br />Home Grown/Freeware<br />Point Solutions<br />Web Services<br />Identify<br />Identify<br />Resolve<br />Isolate<br />Resolve<br />Isolate<br />DATA SMOG<br />Employees<br />Validate<br />Validate<br />Correlate<br />Tool Mgt.<br />
    25. 25. Business Challenges<br /><ul><li>Web Platform more important to the business
    26. 26. Customer expectations increasing
    27. 27. Complexity becoming more challenging
    28. 28. Resources stretched further
    29. 29. IT budgets stretched Further
    30. 30. Customer Experience Increasing in Importance</li></ul>APM<br />WA<br />CEM<br />Home Page<br />Dashboards<br />Funnel Reports<br />Search Result<br />Product Page<br />Trends<br />Fault Isolation<br />Visual Replay<br />Application Performance Management<br />Customer Experience Management<br />Web Analytics<br />
    31. 31. What Gomez First Mile Does<br />Evaluates all website traffic<br /><ul><li>Sees every transaction related to a Gomez test
    32. 32. Unifies Real-user and Active Monitoring</li></ul>Active Tests<br />End-user RT<br />Characterizes end-user response time<br /><ul><li>Measures total end-user response time
    33. 33. Measures the time spent with the data center</li></ul>Data center RT<br />Real User<br />Traffic<br />Data center RT<br />Quantifies business impact<br /><ul><li>Measures pages views and users impacted by a performance problem</li></li></ul><li>Summary<br />
    34. 34. To quantify and proactively reduce business impact due to performance issues in the customer experience delivery chain<br />Quantify business impact of Web performance problems<br />Automatically prioritizes performance problems by number of page views and users affected<br />Create A Proactive Monitoring Framework<br />Identify and resolve issues before they lead to a degraded customer experience<br />Take a holistic – correlated approach<br />Build on a set of integrated tools providing correlated data with end to end visibility<br />
    35. 35. Q&A Time<br />
    36. 36. Thank You<br />