Six Challenges Facing Online Retailers during Black Friday Fortnight

Stuart Pearson of Jumpstart urges retailers not to miss out through unpreparedness as Black Friday hits

Five or so years since it first crossed the Atlantic, Black Friday fortnight - and the run-up to Christmas - continues to hold challenges for ecommerce businesses, according to R&D tax credits specialist, Jumpstart. 

Although online retailers are better prepared than ever, new issues are constantly arising, says Stuart Pearson, a former IT developer who is now a Jumpstart adviser working with ecommerce companies. He says: “While retailers have greatly improved their ability to deal with traffic spikes, the changing landscape - for example the growth in social media sites and outlets and the rise in cybercrime - means there are plenty of other challenges to be addressed.

“The UK is a global leader in ecommerce and we work with many companies that are developing exciting new technologies. However, running an ecommerce operation can throw up complex challenges, and retailers should be aware that it is not just work on leading-edge systems that will qualify for R&D tax credits; often it is dealing with the day-to-day challenges too.”

Here are some of the key issues that companies are reporting this year:

1.        Server response times
Dealing with traffic spikes is less of a problem than it once was, as retailers have increased their capacity either by using flexible hosting services, or creating their own load-balanced environments. However, problems can still arise if the additional servers cannot be brought online fast enough when traffic levels step up. 

2.        Improving customer insights
While retailers are more sophisticated in using data to drive customer insights, the widening array of social media sites means there is now even more to draw upon and integrate. While there are many analytics solutions on the market, some companies are developing their own; both to provide bespoke data and avoid having to share it with a third party like Google.

3.        Managing multiple outlets
A great website is not enough. Today’s retailers need a presence across multiple channels such as eBay and Google. However, firms selling simultaneously on different sites often struggle to manage stock levels and inventory. Commercial solutions are available but can be expensive and not ideal for everyone, so many companies are developing their own.

4.        Promotion problems
Multiple promotional offers and the increasing use of dynamic pricing can create problems at the checkout. Developers may have to be inventive to ensure the system can work out which apply, which don’t and which can be used in combination.

5.        Security and data privacy
With more than half of all retail fraud now ‘cyber enabled’, security and data privacy are amongst the biggest challenges for ecommerce operators. In the run-up to the introduction of the General Data Protection Regulation (GDPR) in May, 2018, big ecommerce retailers are now developing their own fraud detection systems.

6.        Warehouse efficiency
As higher sales volumes put greater pressure on the warehouse, it is all the more important to ensure that orders flow smoothly through the system. Companies are recognising that improving warehouse efficiency offers real scope for savings. One innovation is the use of autonomous drones for stock checking. The challenges are to integrate them with the main stock management system and stopping them crashing as they fly around scanning the inventory.

Pearson adds: “Any work that involves addressing complex and challenging issues, where you are required to come up with innovative technical solutions and where there is uncertainty about how effective they will be, could potentially qualify for R&D tax credits. Retailers should ensure they are not missing out. However, each case is different and to check their eligibility, they should speak to an adviser who understands the nature of the work they do.”