eCommerce Spikes Galore – How’s Your Personalization Engine Faring?

Over the past 24 months or so, eCommerce across online grocery, consumer electronics, home appliances, fashion, beauty and wellness to home entertainment purchases including streaming services and beverages like wine, beer, and liquor has seen sharp growth. An eMarketer report predicts that the global retail eCommerce sales will reach a value of $6.17 trillion by 2023, accounting for 22.3% of the total retail sales, up from 13.8% in 2019.

Algonomy has been observing sharp spikes in traffic that resemble days around Thanksgiving. In other words, almost every other day seems to be a Black Friday.

So, is your real-time personalization provider equipped to handle this?

In the recent past, there have been many new personalization providers that claim to offer personalization. Their offers include simplistic recommendation engines, A/B testing tools, and even search engines that tout the ‘wisdom of the crowd’ functionality. One of the things that is easily overlooked is their ability to smoothly manage these spikes in traffic, for which they are wholly dependent on third-party cloud service providers. 

With consumers expecting top-notch real-time personalized experiences, the associated workload is difficult to predict and has a direct impact on variable costs. Companies that are ill-equipped to handle this at times could compromise personalization techniques to limit their exposure.

To cite an example, one of our leading competitors was so bogged down with the cost spikes from their cloud provider, they decided to switch off some of the personalization features for more than 50% of their customers! Just think about the repercussions of that step.

Imagine a scenario where you are relying on the personalization provider to drive more conversions by leveraging the full extent of their expertise, especially when you are experiencing a big influx of traffic. What if at precisely this time, your shoppers start seeing non-relevant or generic recommendations at the time when you need to display products that best match their preferences and balance them with popular new products or present the best-bundled offers. In other words, you end up losing precious sales and worse still not have those shoppers return, even though you pay a premium for it.

The only way for these software companies to meet their operating costs is by passing on these costs to their clients on a monthly recurring basis. If you are an eCommerce company in an intensely competitive environment, the last thing you need is escalating costs that eat into your margins. 

The advantage of working with a provider like Algonomy is that the foundational platform sits on 13 geographically discrete and spread-out data centers and offers you a response time that is the best in the industry. 

Furthermore, Algonomy’s IT and Ops teams closely monitor the Internet and shopping traffic, and can smoothly scale capacity on-demand, whether it is up or down. This has allowed Algonomy to consistently provide 100% uptime during festive and high-traffic periods with a great response time and perfectly adapt to seasonal changes for the past 14 years.

So, before you sign your next contract or even renew it, we’d urge you to pay special attention to the fine print on variable costs. Importantly, choose a personalization provider that has proven credentials in supporting companies operating in high-growth environments and understands the nuances well. 

With more than 400 top retailers and brands on the Algonomy platform, we know a thing or two about delivering the best customer experiences no matter what the conditions. You can count on us.

Learn more on how we help retailers deliver personalization at scale.