Internet disruptions cost eCommerce retailers millions

Internet disruptions are costing eCommerce retailers millions every year, according to new research.

Catchpoint has released the results of a survey of large retail and consumer brands showing the high cost of internet disruptions on their businesses. 

The survey, conducted by Forrester Consulting on behalf of Catchpoint, shows that nearly 40% of all respondents suffer customer-impacting disruptions, which cost up to $1 million per month.

The survey found 61% of respondents said internet disruptions (defined as downtime or latency) have resulted in lost revenue, while 64% reported damage to their brand's reputation and led to lack of consumer confidence from these disruptions. Some 39% of respondents said internet disruptions cost their company between $500,000 to $999,000 due to lost revenue, compensation to customers and extra time spent fixing the issues. Meanwhile, 12% stated that it costs their company more than $1M. The research found 65% of respondents reported that even small disruptions in the flow of commerce can cause customers to halt their purchase cycle, highlighting the importance of identifying and resolving internet disruptions.
 
In addition to asking respondents about disruptions and their consequences, the survey examined states of readiness for disciplined Internet Performance Monitoring (IPM). Notably, respondents reported:

• Only 29% of their companies monitor the full "Internet Stack" (routers, firewalls, ISPs, DNS, CDNs, cloud services, website payment providers, video hosting services, etc.), resulting in an average of 76 disruptions per month due to inadequate visibility. 
• 61% feel they require tools to anticipate, detect, and fix Internet performance problems quickly, indicating a need for better management of internet performance. 
• 74% say that customers have little tolerance for disrupted experiences and 71% say employees expect the same frictionless digital experiences as customers.

 
"The survey findings make a strong case for IPM, quantifying the consequences of not closely monitoring all aspects of a customer's experience and addressing issues before they happen," says Howard Beader, Vice President of Product Marketing at Catchpoint. 

"Monitoring the entire Internet Stack isn't easy, with thousands of blind spots that could become disruptions or affect experience, but clearly failure to do so is having a material impact on businesses profitability and productivity."

Forrester completed the online survey in February 2023, and had 262 respondents who hold director-level or higher roles in IT, CX, digital business operations, e-commerce, engineering/development, and marketing/advertising, and who are responsible for e-commerce strategy and technology in the consumer products goods and retail industries across North America, Europe, and APAC. The focus was on consumer brands and retailers with a significant volume of online transactions and a company size of 1,000+ employees.