E-Commerce Holiday Battle Plans

The weather outside may be frightful, but the potential for revenue is delightful. True, rewriting a holiday song so it fits e-commerce may take away some of the lyrical charm, but for e-tailers, it still captures the spirit of the season.

As the holiday period approaches, e-commerce players are gearing up for the online buying rush. Many analysts predict this will be the best year yet in terms of site visits and sales.

What are companies doing to ensure the season proceeds as smoothly as possible?

Finally, Some Wisdom

After years of tinkering with server capacity, site design, product selection, customer service and fulfillment, e-commerce sites seem to have reached the point of being able not only to develop solid holiday plans, but also to tie promotions effectively to the season.

"There's an incredible amount of seasonality in e-commerce, just as there is in all retail," IDC analyst Jonathan Gaw told the E-Commerce Times. "Everyone knows this, so they've learned how to handle it."

P.K. Van Deloo, brand manager for Yahoo Shopping, told the E-Commerce Times that the site identifies buying trends months before the holiday season arrives, then uses that insight when developing online promotions.

For example, digital cameras are hot right now, so Yahoo has created a special section on the shopping portion of its site to provide better comparisons of different digital cameras. It has done the same for other kinds of gift items, such as toys and MP3 players.

"We've always had a lot of resources devoted to peak periods like the holidays," Van Deloo said. "Now, we have a better idea about what people want and how to get it for them."

Serving It Up

Another thing sites have learned is that they need plenty of server capacity to handle holiday traffic. Many sites have examined the experiences of past buying seasons and ramped up where needed.

Smaller e-commerce sites often can get help with this task from their ISPs. Christopher Faulkner, CEO of hosting provider C I Host, told the E-Commerce Times that during the holiday season, a 35 percent increase in Web traffic is not unusual.

To help its customers, C I Host offers temporary load balancing services and additional servers that can be returned when sales slow down after the holidays. In fact, the company has put together a package specifically for this time of year.

"About two years ago we started offering holiday hosting, and it became popular very quickly," Faulkner said. "It's a temporary solution that the customer can get rid of in January."

Big Guns Ready

At larger e-commerce firms, lessons learned in previous years also have changed today's battle plans. For example, at Ritz Interactive, which runs a bevy of online stores like RitzCamera.com and RitzElectronics, the company increased the capacity of its servers by altering their configurations.

Fred Lerner, Ritz Interactive president and CEO, told the E-Commerce Times that last year the company used a combination of application servers and Web servers. "This year, we split them up to give us additional redundancy," he said.

Other high-traffic sites have chosen to tackle the holiday spike by gradually building up capacity during the year. As Larissa Hall, vice president of Buy.com, told the E-Commerce Times: "Our site was built with scalability in mind.... There's been an ongoing effort to invest in our technology to be sure we're ready for the holidays."

Hire Learning

Just as companies take on extra server capacity, they also tend to take on more staffers, at least temporarily. However, some e-commerce companies that want to keep budgets under control have implemented more inventive staffing procedures.

At Ritz Interactive, for example, every staff member was put on call as of the second week in November.

"Many people are now on a 24/7 schedule," Lerner said. "They have pagers. That extends to customer service, engineering, almost everyone. Hopefully, every one of the staff will get a very good night's sleep. However, if there's a blip, we'll be able to get instant response."

Ritz uses a notification system that sends a pager message, an e-mail and a cell phone message to relevant staffers. "Instead of a rotating schedule, our entire staff is hardwired," Lerner said.

In contrast, some e-commerce companies have decided to beef up only in certain staffing areas. Patrick Byrne, CEO of Overstock.com, told the E-Commerce Times that his company focuses heavily on getting its customer service and fulfillment operations just right.

"Our warehouse is a unique operation," he said. "When the holiday comes, we're ready."

With strong infrastructures and established battle plans, it seems as if most e-commerce sites are ready for the holiday deluge. But how will they lure customers to ensure the planned traffic volume materializes?

Stay tuned for Part 2.