E-commerce

Enhance customer experience through service level objectives for dependable e-commerce

In the last several decades, e-commerce has revolutionized consumer shopping behavior. As of 2023, customers have access to nearly 27 million global e-commerce sites, including almost 14 million in the U.S., providing them with a vast array of options.

Even though Amazon and other large sellers are prominent, the vast array of options leads to intense competition for highly specialized and niche sellers as well. In light of this, it has become crucial for e-commerce brands to prioritize site reliability in order to draw in and keep customers.

For some time, IT departments have acknowledged the connection between reliability and user retention. They have adopted conventional reliability practices, such as enhancing Mean Time To Recovery as a key performance indicator (KPI), focusing on maximizing application uptime, and minimizing the occurrence of catastrophic outages. These practices are more reactive than proactive, and in 2024 this does not suffice.

In fact, a recent customer experience survey conducted by Nobl9 revealed that 40% of users were unlikely or very unlikely to continue collaborating with a company whose applications malfunction. In light of this, online retailers need to implement a customer-focused reliability strategy based on Service Level Objectives, or they may lag behind competitors who are more adept at understanding user needs.

Moving beyond traditional reliability, SLOs are performance targets that service providers establish for their system over a specified duration. These targets are part of a Service Level Agreement that details the expected level of service for the customer and the penalties for failing to meet these targets. SLOs correlate with error budgets, which define the maximum allowable instances of performance degradation for a system within a specified timeframe. For instance, if an SLA specifies that a system will be available 99.95% of the time, it implies that the SLO is probably set at 99.95% uptime.

Since perfect performance and 100% reliability cannot be achieved, it is unrealistic to set a service level objective (SLO) of 100%. Instead, SLOs serve to examine an application in its entirety for the purposes of guiding IT investment decisions, establishing customer expectations, and assessing performance relative to business objectives. Moreover, SLOs enable teams to establish more rigorous performance targets for aspects of the application that have the greatest effect on customer experience, while easing thresholds for components that are less directly related to customers.

E-commerce companies can benefit significantly from an SLO approach, as their applications comprise a set of services that all need to operate correctly for the main application to function. Kubernetes clusters may be included in even a simple app hosted on a large cloud platform to automate scaling; internal microservices such as an authentication server, shopping cart, and search functionality; as well as external services like CAPTCHA for logins, a payment gateway, and a CDN for hosting images and videos.

Traditional reliability practices maintain a clear separation between these elements, resulting in limited understanding of how they affect one another. Maybe one endpoint monitoring tool examines servers, another gathers infrastructure data, yet another tracks containers, and so forth. This approach to making strategic reliability decisions ensures that every component of the application is held to the same or comparable standards. For e-commerce companies, minimizing outages is essential; however, conventional reliability measures do not consider the subtle performance variations of an application even during periods without outages — these can still result in poor customer experiences.

Nobl9’s survey revealed that nearly 60% of participants encountered slow load times or a complete app crash in the past year, and 40% experienced forced logouts. Worryingly, these three problems are also the ones that customers found most exasperating. SLOs, in contrast to conventional reliability methods, offer insight into the exact components of an application that could lead to each of these various problems. In an e-commerce system, for instance, the app could be operational while the login server is not functioning. It could also be that the app is functioning, but the checkout process takes a long time to load, leading to a high rate of cart abandonment. SLOs give e-commerce businesses the ability to track each of these aspects of their application regarding end-user experience.

Everyday reliability problems are crucial and often unnoticed.
For the financial results of e-commerce, it is not major outages that are the biggest concern. Nobl9’s survey revealed that 53% of individuals would feel less frustrated about reliability issues if they were aware of a major outage affecting the application. Rather, it is the accumulation of minor reliability issues, such as a delayed page load or an unforeseen logout, that leads to customer churn — frequently without businesses being cognizant of it. This issue is exacerbated by customers’ reluctance to offer feedback; it was improbable that respondents would write reviews for apps, regardless of their feelings toward them. Even worse, over 70% would give up on an app entirely after only 1 to 5 minor problems.

Even with this absence of concrete feedback, companies need to keep in mind that neglecting ongoing reliability issues can have a major effect on customer satisfaction, the overall customer experience, and ultimately the financial performance of the business.

Client Contentment
The Net Promoter Score of a company is an important measure of customer satisfaction and loyalty, and it correlates with reliability. Customers are less inclined to recommend a product or service with persistent reliability problems, which restricts organic growth. Additionally, customer retention will decline due to rising churn rates linked to inadequate performance. Nobl9’s customer experience survey revealed that when facing a problem, 30% of users would resort to an alternative application, while nearly 20% would completely remove the original app. Customer feedback may vary, but persistent reliability problems can result in negative reviews and ratings that deter potential customers.

Overall Customer Experience Failures in microservices that underpin the various functions of an e-commerce site — such as the crucial checkout process — lead to incomplete transactions and dissatisfied customers. E-commerce websites, which rely on a smooth transition for consumers from search to checkout, are particularly affected by lengthy loading times. Users may abandon their shopping carts due to even a slight delay of just a few seconds; the average e-commerce website loses 50% of its visitors when pages take over 3 seconds to load. Users are also frustrated by frequent app crashes; if an app goes down repeatedly, they become less engaged and often seek alternatives.

Core Business Metrics
Page load times have a significant impact on conversion rates. A delay of just one second in page loading can lead to a 7% decrease in conversions, potentially resulting in millions of dollars lost in sales each year. Customer lifetime value can also be reduced by inconsistent performance. Due to customers’ sensitivity to small issues with the apps they use, those who are dissatisfied are less likely to return, resulting in long-term declines in revenue and profitability. Costs associated with operations will increase along with reliability problems. More incidents lead to an increase in support tickets, engineering overtime, and ongoing firefighting. Overall, adopting a conventional reliability approach that regards all service elements equally — overlooking varying effects on customer experience — leads teams to allocate excessive resources to non-essential areas.

Day-to-day reliability issues become visible through SLOs
When users often leave without a trace, how can organizations swiftly make informed decisions to address customer experience issues? Enter SLOs: within the framework of an SLO, each “micro-outage,” such as a one-off crash, uses up part of the error budget. When the error budget consumption hits a specific threshold, teams will receive an alert about a spike in the error budget burn rate, along with details on which SLO is specifically burning. At their core, SLOs serve as alerts when the customer experience of an app is declining, guiding teams to the specific parts of the app that require focus.

After teams establish clear service-level objectives (SLOs) that align with customer experiences, which specify the desired reliability and performance of services, they can identify when incidents exceed acceptable error rates. This enables ecommerce companies to concentrate on what truly counts:

Proactive Reliability Management By establishing acceptable error thresholds and measuring performance against these targets, SLOs enable businesses to recognize and address potential incidents before they negatively impact customer experience. While MTTR remains a significant reactive KPI during outages, SLOs serve as indicators of possible reliability problems for proactive management.

Reliability with a Customer Emphasis SLOs allow e-commerce businesses to establish goals that correspond with customer views of satisfactory performance. This guarantees that organizations offer satisfactory shopping experiences that align with user expectations.

Averting excessive investment in IT Consumers’ expectations vary according to location, utilized technologies, and other demographic/technographic factors. Global sellers often incur substantial over-investment when they promote a uniform reliability target that does not take into account customer location, operating system, device type, and other factors. By customizing SLOs to meet these diverse expectations, teams can distribute IT reliability resources in a smart way, rather than merely responding to the demands of users requiring the most upkeep.

Informed Decision Making Error budgets and SLOs provide essential clarity for organizations determining how to allocate IT resources. As the error budget nears depletion, teams can tactically concentrate on bolstering infrastructure or minimizing technical debt. When there is a significant amount of error budget remaining, teams can choose to create new features and deploy updates to production, as the error budget cushion will absorb any problems that occur.

Preparing for Seasonal Rushes During major shopping periods such as Black Friday or the back-to-school season, e-commerce applications experience a surge in user activity. Adobe anticipates that online sales during the 2024 holiday season will amount to $240.8 billion, reflecting an increase of 8.4% compared to 2023.

Customers continue to anticipate a smooth purchasing experience, so businesses need to plan meticulously to prevent their applications from crashing and deterring consumers. Effective SLOs provide businesses with reassurance, as understanding the error budget burn rates of the app’s essential components enables teams to focus their efforts on maintaining the infrastructure and services that have a direct effect on customers.

Conclusion For e-commerce organizations, high reliability and optimal performance hinge on delivering an outstanding and consistent customer experience. In addition to averting major outages, concentrating on daily reliability and addressing minor problems such as application failures or sluggish loading times is crucial for enhancing the overall user experience and business results.

E-commerce retailers can enhance their customer focus and take a more proactive approach to reliability management by implementing SLOs. An SLO framework will not only boost customer retention but also improve operational efficiency and offer a competitive advantage for ongoing growth in the digital marketplace.