Why digital experiences will make or break the holiday season for retailers in 2023

October 31 2023

Survey results reveal online shopping is set to soar over the holiday season and retailers must ensure their applications are ready.

Research published today by Cisco AppDynamics reveals that consumers around the world are planning to do more of their holiday season shopping online than ever before this year.

On average, consumers expect that 59% of their spending on key shopping dates such as Black Friday and Cyber Monday will be online this year versus in-store, compared to 53% last year.

But, as they search for great deals, online shoppers will be even less forgiving than normal if brands fail to deliver a seamless digital experience. 66% of consumers claim that it doesn’t matter how good the deals that retailers offer are; there is still no excuse for poor online shopping experiences.

As retailers look to take advantage of heightened consumer appetite for online shopping, the findings provide a stark reminder about the importance of application performance and availability during the busiest and most important weeks of the retail calendar.

Online spend set to jump significantly this holiday season

With costs of living rising across the world, consumers have increasingly looked to take advantage of discounts and low-cost deals during big shopping moments like Black Friday and Cyber Monday. And this year, they are favoring online shopping over in-store as they believe they can make their budgets stretch further (48% of consumers), get more choice (42%) and avoid last-minute panic buying in the shops (31%)!

43% of consumers expect to do more of their holiday shopping online (through applications and digital services) compared to last year, as opposed to only 13% who wish to buy less. Whether buying food and drink for family celebrations, household essentials or gifts for friends, shoppers will be spending more of their money online over the coming weeks.

For online retailers, this represents a massive opportunity to attract new customers and drive revenues, but application owners need to recognize that consumers aren’t just looking for great deals this year — they also expect world-class digital experiences.

No second chances for retail brands this holiday season

The research, conducted amongst more than 12,000 consumers in 12 countries, reveals that consumer expectations for digital experience continue to rise, and people’s reactions when they encounter poorly performing applications and digital services are getting stronger.

64% of consumers claim that if the applications and digital services they will be using to do their holiday shopping this year fail to perform, it will leave them feeling anxious and angry.

Online shoppers aren’t willing to put up with slow or poorly performing applications – not when they are feeling under pressure to find the very best deals and stick to their budgets. In fact, more than half (58%) of consumers claim that retail brands will have one shot to impress them this holiday season, and if their digital service or application does not perform well, they won’t use it again.

Any seasonal goodwill will disappear the moment consumers encounter a bad digital experience – they will simply turn their back on the brand in question and go elsewhere. Interestingly, while there is a strong preference for online shopping over in-store this year, the research indicates that this trend could easily be reversed if consumers don’t get the level of digital experience they now expect. 71% state that if the applications and digital services that they will be using for their holiday shopping fail to perform, they will be more inclined to go back to shopping in-store.

Application observability is essential for retailers to take advantage of heightened demand

Retailers need application observability to optimize digital experiences and take full advantage of thi opportunity to increase revenues over the holiday season. IT teams are fully aware of the need to focus on application availability and performance over this key period. Many have firsthand experience of the hard work and long hours that go into ensuring  applications and supporting infrastructure are able to cope with huge spikes in demand.

However, with technologists in all sectors managing ever more complex and distributed hybrid environments, optimizing application availability and performance is becoming far more challenging.

Rapid adoption of cloud native technologies is enabling retailers to accelerate innovation speeds, but many IT teams now find themselves without the visibility and insights they need to monitor and manage performance within Kubernetes® environments.

Retailers therefore need an application observability solution which provides flexibility to span across both cloud native and on-premises environments — with telemetry data from cloud native environments and agent-based entities within legacy applications being ingested into the same platform. Application observability provides a single source of truth for all technologists, enabling IT teams to integrate application availability and performance data with security throughout the application lifecycle, and making it easier for technologists to rapidly detect and remediate issues.

Application observability allows IT teams to take a more proactive approach to managing modern application environments, accessing deeper insight to address performance issues before they impact customers.

With greater numbers of shoppers planning to spend a bigger proportion of their holiday shopping budgets online this year, retail leaders will be looking to maximize this opportunity. But they need to recognize that in order to do this, their applications and digital services must be operating at peak performance at all times. Consumers will only want to buy from retailers that are able to offer both great deals and seamless digital experiences.

James Harvey is CTO Advisor EMEA, Cisco Observability. He is responsible for setting the AppDynamics regional product strategy. His overarching role is to advise and help organizations better understand their business needs and realize the value and benefits of full-stack observability with business context. He joined AppDynamics in 2018.

James has more than 20 years of experience in the tech field, having held senior IT leadership positions at various companies in different sectors like banking (Royal Bank of Scotland and ABN AMRO Bank), retail (New Look) and oil (BP).

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