Losing Millions in Minutes: How much Network Downtime costs to Retail industry?

Blog » Losing Millions in Minutes: How much Network Downtime costs to Retail industry?

Shyamal Kumar on November 6, 2018

Nov62018

In 2017, Retail e-commerce sales worldwide amounted to 2.3 trillion US dollars. By 2021 it is projected to grow to 4.88 trillion US dollars. With Retailers paying heavy price for network Downtime, can the retail industry achieve the estimated trillion dollars mark? 72% of Retailers reported loss in sales, rise of customer Dissatisfaction and low business productivity during Network Downtime.

July 16^th 2018, online shoppers across United States were all set to make the most from Amazon’ Prime Day Sale. However, what happened next simply turned out to be a disaster for shoppers and Amazon.

The online extravaganza kick started at 3PM ET. Within no time online traffic boomed. Minutes later, around 3:05 PM ET, the ecommerce giant started experiencing issues with their website.

Soon Amazon started receiving complaints from shoppers – in particular from California, New York and the Pacific Northwest – on all social channels. By then it was clear that it was an outage! Amazon’s website started crashing due heavy online traffic.

So how much did the ecommerce giant loose from this Downtime?

The Answer is a massive $34 Million per Hour.

Last year the online sale extravaganza managed to generate an estimated $1 billion in sales in just 30 hours i.e. approximately around $34 million every hour.

8 October 2018 to hit the 1 million daily order mark restaurant search, discovery, and online food ordering platform Zomato launched “No Cooking Sunday” campaign offering users 50% discounts on delivery across several cities in India. Within few hours customer complaints of service disruptions started pouring.

Later the company was quick to issue a statement claiming that there was an outage as a result of heavy traffic flow that the platform witnessed on Sunday.

“We are quite overwhelmed with the positive response; it has significantly exceeded expectations. We have comfortably crossed the million order milestone on Sunday – and would have ended up at closer to a 2.5 million mark had we not seen the outage. While the extraordinary volumes may have delayed our responses, we are committed to resolving all customer queries to their satisfaction and will resolve all queries this time around as well,” said Mohit Gupta, chief executive, Food Delivery Business.

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The Wrath of Network Downtime

Online Retail businesses deal with high level data transactions. Short term network outages have long term impacts. Network Downtime for a minute can makes a company lose millions of dollars

According to Gartner, The average cost of network downtime is around $5,600 per minute. That is around $300,000 per hour. Apart monetary costs, IT downtime can significantly results in overall business productivity

Transaction/sales losses
Loss of Data
Customer dissatisfaction
Restarting/return to full operation
Damage to the company’s brand and reputation
Regulatory compliance effected

During a downtime, 61% of retailers cannot process payments. Around 70% of retailers fail to leverage in-store digital capabilities. More than half of the retailers experience low business productivity. Last but not the least it raises questions to security.

Keeping the Network Always ON

Networking Infrastructure for long was complex and rigid. Added the rigmarole of cumbersome set ups. This results in Human error, one of the biggest causes of Network Downtime.

Thanks to approaches like SDN which has simplified the game for ever. By automating enterprise network IT can significantly reduce the impact of Network Downtime. This reduces the mean time to repair (MTTR).

Solutions like SD-WAN have drastically made life easier for IT teams. By Automation Enterprise Networking, IT teams collect, analyse, and visualize the problem at hand. Reducing MTTR even for a min makes a massive difference to an Enterprises’ bottom line.

READ BLOG: Achieving Unified commerce with SD-WAN

Achieving 99.99% Network availability with SD-WAN

81% majority of organizations now require a minimum of 99.99% availability.

A Network working Non Stop 24/7 throughout 365 days without any Network Outage. Is it possible?? Fortunately with modern IT infrastructures like SD-WAN it is. If leveraged the right way along the correct expertise SD-WAN can provide 99.99% availability of Network infrastructure and services for stores.

Watch Shyamal Kumar, Karthik (CEO and Vice President respectively) and Naganand (Idea Spring Capital) in conversation with YourStory to know why Lavelle Networks is a highly valued SD-WAN company in India and how it is taking on big companies in the Indian networking landscape.