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Many online retailers haven’t figured out the empirical relationship between customer experience and digital performance

Why Digital Performance Management Will Be a Game Changer for Online Retailers
By Ann Ruckstuhl

Amidst the hustle and bustle that was the recent eTail West, one thing was clear to me: many online retailers haven’t figured out the empirical relationship between customer experience and digital performance.

Why? Many brands simply do not pay much attention to the infrastructure that powers their digital business.

Yet behind every interaction between consumers and online retailers is a vast network of websites, mobile apps, third-party service providers, routers, databases, servers, and related technologies. Complexity across this vast network of digital infrastructure is a key barrier to customers realizing great experiences.

Performance is the next frontier for etailers
Gartner notes that this year, 89% of companies will primarily compete on the basis of customer experience, and that these interactions are becoming rapidly more digital.

Forrester estimates that a one-point improvement in a US wireless provider’s Customer Experience Index score (CX Index™) results in an additional $175 million in revenue.

Learn More: Forrester Customer Experience (CX) Index™

Amazon has performed experiments showing that for every 100 millisecond improvement, its sales increased by 1%. With $88 billion in online sales in 2015, that translates to $8.8 million of increased sales per millisecond. Regardless of which research you read (and there are many more), the positive correlation between digital performance, customer experience and revenue is indisputable.

Read: The Customer Experience Imperative: How To Justify The Investment (Forbes)

DPM innovators leading the way
Here at SOASTA, we work with 47 of the top 100 internet retailers to improve their digital performance across their ecommerce and mcommerce sites.

A select group of early DPM innovators are now leveraging data science to sift through billions of THEIR own real user experience data (gathered via our industry-leading beacon technology) to predict future behaviors, user demand, and the performance SLA needed to maximize sales. We have captured many digital performance case studies that you may find helpful. Digital transformation has indeed arrived… led by retail.

DPM innovators leading the way

READ: Retail digital performance management (DPM) case studies

DPM adds the “why?” dimension to your web analytics and APM tools
One frequently asked question at eTail West was “How is DPM different from Google Analytics or New Relic?”

It’s a great question. The simple answer is this:

DPM improves digital performance by measuring, testing and analyzing the “Holy Trinity” (yes, I am Catholic) of digital performance: Customer Experience, IT Performance, and Business Outcome.

By providing real-time, end-to-end performance visibility and insights from website traffic, ecommerce, and IT performance metrics, online retailers are now able to pinpoint and remediate performance issues by campaign, product, channel, device, geography, demographics, and even 3rd party services — quickly and effectively.

Learn More: How the SOASTA Digital Performance Management platform works

Holy Trinity of performance data
For example, when an advertising campaign performs poorly, marketing analytics tools such as Google Analytics and Adobe Analytics can tell you which ads and which landing pages are experiencing low click-through and conversion rates.

Those are the “what” questions you need to ask. Then you need to ask the “why” questions. This is where DPM comes in.

DPM, with its RUM (real user measurement) insights, can tell you why these landing pages are performing poorly, perhaps due to 3rd party services (a typical web page today can contain upwards of 75 third-party scripts), page structure, ad visibility, compression, resource timing, or bandwidth issues such as mobile connectivity.

DPM "holy trinity"

DPM complements APM

Similarly, DPM complements APM tools such as New Relic, Dynatrace and AppDynamics by adding front-end performance data from the perspective of the end users (using metrics such as application response time, screen rendering time, memory, battery and data plan usage) to back-end performance data collected by APM tools (using metrics like server response time, DNS resolution time, and time to first byte).

Given that 80-90% of a web page’s response time occurs at the front end, the ability to correlate front-end and back-end performance data through DPM is paramount to achieving peak online retail performance.

Now it’s your turn
DPM innovators — such as the retail customers we work with here at SOASTA — have proven the benefits of digital performance management, and have given us some blueprints for success.

Reflecting on my earlier post on the five ecommerce megatrends to watch for at eTail West, I’d venture to say that online retail is in the midst of a wholesale transition from the Early Adopters phase to the Early Maturity phase of the Diffusion of Innovation Model. I predict accelerated DPM adoption, frictionless customer experience and many happy transactions ahead.

Check out my eTail West DPM presentation below. I’d love to get your feedback and thoughts on this topic.


Read the original blog entry...

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