The landscape of high-traffic digital shopping events is continually evolving, marked by the trend of promotions commencing earlier each year.
Notably, Cyber Week, spanning from U.S. Thanksgiving to Cyber Monday, stands out as a crucial period for online sales. During last year's Cyber Monday, global online consumer spending reached $1.14 trillion, with a peak hour expenditure of $12.8 million per minute in the U.S. A few minutes of downtime during such events could prove catastrophic for businesses.
The repercussions of poor digital experiences are significant, with downtime costs exceeding $150,000 per hour for almost two-thirds of organizations, as highlighted in The State of Observability 2023. In an era where success and failure hinge on slim margins, delays in webpage loading can have profound consequences. For instance, the abandonment rate for websites taking more than three seconds to load was 40% in 2017, escalating to 87% in 2023 for sites taking more than two seconds. Google, aiming for under half-a-second load time, penalizes slow websites in search rankings.
As organizations increasingly adopt cloud technologies to accelerate customer capabilities, the ephemeral and dynamic nature of these environments introduces new challenges. The multitude of variables necessitates superhuman context for swift problem resolution. However, the proliferation of disparate monitoring tools for applications, web, and logging exacerbates the issue rather than mitigating it.
With this study as the backdrop for this episode of #CXOSpice, I had the pleasure of hosting Mala Pillutla, Global Observability Strategy and Derek Dykens , Global Retail and Hospitality Advisor from Splunk. We delved into the world of digital resilience, exploring its importance during high traffic events, and gained deeper insights from Splunk’s Digital Resilience Study.
Here are my key takeaways:
Significance of Digital Resilience: Our discussion highlighted the critical importance of digital resilience in today's dynamic landscape of digital experiences across various sectors. The ability to maintain performance during high-traffic events emerged as a pivotal factor. In this context, even a slight delay in webpage loading, lasting as little as two seconds, can drive away more than 87% of customers, underscoring the need for robust digital resilience strategies.
Definition of Digital Resilience: Mala emphasized that digital resilience is not merely about bouncing back from disruptions; it's about thriving in the face of challenges, especially during peak scenarios like Black Friday. The adoption of good observability practices emerged as a key enabler for swift issue identification and resolution. It ensures reliability and delivers exceptional customer experiences.
Splunk Observability: Observability encompasses practices that can handle unstructured data at a petabyte scale, facilitate real-time detection with guided root cause analysis, and leverage advancements in AI and ML for predictive analytics and issue resolution. Notably, seven leading e-commerce entities, including Dana, Rappi, Lenovo, Stripe, Tesco, and Puma, presented compelling statistics from Splunk's Digital Resilience Study, demonstrating the effectiveness of robust observability practices.
Strategies for Peak Traffic Events: Mala outlined strategic imperatives for companies preparing for high-traffic events. These include the emphasis on unified visibility, early detection mechanisms, and efficient data control solutions. Derek highlighted the significance of a cohesive observability strategy, particularly with the increasing prevalence of edge computing, to ensure a delicate balance between innovation and security.
Ongoing Optimization and Long-Term Investment: Both Mala and Derek stressed the imperative for continuous optimization and the necessity for companies to invest in long-term digital resilience models. Resilience is not merely a choice but a strategic necessity for driving top-line profitability while reducing operational costs. The conversation concluded with a resounding call for organizations to view digital resilience as an ongoing commitment rather than a one-time decision.
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Sustaining digital resilience necessitates a holistic understanding of the entire business landscape, leveraging AI for swift problem identification and troubleshooting guidance. The ability to promptly pinpoint the source of issues, be it within business operations, IT infrastructure, or external parties, is paramount for ensuring ongoing digital resilience.
As we approach Super Bowl Sunday, what is your observability strategy to retain your digital resiliency?
Helen Yu is a Global Top 20 thought leader in 10 categories, including digital transformation, artificial intelligence, cloud computing, cybersecurity, internet of things and marketing. She is a Board Director, Fortune 500 Advisor, WSJ Best Selling & Award Winning Author, Keynote Speaker, Top 50 Women in Tech and IBM Top 10 Global Thought Leader in Digital Transformation. She is also the Founder & CEO of Tigon Advisory, a CXO-as-a-Service growth accelerator, which multiplies growth opportunities from startups to large enterprises. Helen collaborated with prestigious organizations including Intel, VMware, Salesforce, Cisco, Qualcomm, AT&T, IBM, Microsoft and Vodafone. She is also the author of Ascend Your Start-Up.