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Online Retailers Can't Afford AWOL Websites

Nearly one in five online retail website experienced downtime during the 2011 holiday season . / Credit: 404 error message page not found image via Shutterstock

Website downtime is the kiss of death for online retailers ―especially during the critical holiday season, when sales spike. Last year, websites that were out of commission put a damper on holiday cheer for nearly one in five online retailers, with typical losses ranging from hundreds of thousands of dollars to tens of millions, a new survey discovered.  As a result, merchants are taking steps this year to make sure their websites aren't AWOL during the holiday season.

It's part of a push by e-retailers to improve the overall online shopping experience this holiday season, according to a survey of 106 e-retail decision makers that was sponsored by Rackspace Hosting, a hosting services company. E-retailers are increasing computing capacity, redesigning websites and taking additional steps to address security and availability concerns.

One of the biggest challenges on e-retailers' minds is downtime, with 77 percent saying they are taking steps to reduce or eliminate it. Almost half of the survey respondents (45 percent) estimated they would lose between $500,000 and $5 million if their company's site went down for a single day during the holiday season.

More than a quarter of retailers with online sales said they are working with third-party hosting providers to make sure customers can keep shopping online during high-traffic periods.

But even more of the surveyed e-retailers said they will still rely on internal IT resources to see them through the season. Twenty-nine percent said they are hiring more IT staff, and about a third (37 percent) will use load testing and build up website redundancy (33 percent). Nearly half (48 percent) said they would increase computing capacity to improve the online shopping experience.

"Many online retailers have found out the hard way in 2011 that their internal IT systems and resources weren’t ready to handle large spikes in holiday sales," said Adrianna Bustamante, who works in commerce channel development for Rackspace. "With 45 percent of retailers expecting holiday sales to grow this year, it is important that retailers take steps to improve the online shopping experience and reduce or eliminate downtime during the all-important holiday season."

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.We're also on Facebook & Google+.

Ned Smith

Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and has a masters in journalism from the University of Arizona.