As frenzied crowds pack stores in pursuit of Black Friday deals on toys and gadgets, the holiday shopping season is officially underway. The National Retail Federation forecasts that Americans will spend $630.5 billion, up a respectable 3.7 percent from last year. With holiday shopping increasingly moving online, retailers find themselves facing bigger demand and tougher challenges for their websites and shippers.
Companies used to worry about whether their sites would melt down under increased holiday traffic. But now that they can easily contract for additional servers, handling holiday demand isn’t quite so stressful.
“Cloud computing is there and adding incremental capacity is just a flick of a switch, so that’s not a problem at all,” said Suresh Kotha, management professor at the University of Washington’s business school.
Being ready to make the sale is one thing. Getting it to customers can be trickier. The major shipping companies expect to take on more than 1.5 billion packages this holiday season. Shippers have more data than ever to help predict demand and staff up accordingly. But the closer it gets to Christmas, the more challenging things can get.
“If sales are light at the beginning of the season, we may find the retailers may add some promotional activity at the end of the season, which could create a spike,” explained Rod Sides, vice chair of Deloitte and leader of its U.S. retail and distribution practice. “That would put a lot of pressure on existing infrastructure.”
And as always, exceptionally bad winter weather could render all the planning and Big Data useless.
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