Customers shopping at Nike Inc. and Macy’s Inc. complained about problems trying to buy goods on Black Friday, as the companies scrambled to remedy technical complications on the critical shopping day.
During Investor’s Day last month Nike’s board entered the stage to tout Nike’s Consumer Direct Offense. In the process they discussed their shift to DTC and how their website delivery system would be an integral part of the move. As soon as I heard the discussion point it reminded me of information released by L2:
and by Business Insider earlier this year where they discussed the fact that a number of major companies suffered serious issues with their websites on Amazon Web Services.
In the Business Insider article here is one of the major points discussed:
During AWS’ four-hour disruption, S&P 500 companies lost $150 million, according to analysis by Cyence, a startup that models the economic impact of cyberrisk. US financial services companies lost an estimate $160 million, the company estimates.
Specifically, the web-monitoring company Apica, which watches for internet-performance issues worldwide, crunched the numbers on how AWS’ downtime affected retail sites. It discovered that 54 of the top 100 internet retailers were affected with a decrease of 20% or greater in performance, and some websites went down completely.
Websites that on average usually require a few seconds to load took more than 30 seconds.
Top websites’ load times increased by triple digits, according to Apica:
Disney Store took 1,165% as long
Target: 991% as long
Nike: 642% as long
Nordstrom: 592% as long
I wrote this when Nike discussed this strong push to digital during the speeches by Nike’s Chief Digital Officer: (Nike better move their sites from Amazon Web Services!… There are definitely questions with some of this information especially in how Nike will handle their relationship with Amazon. I see the fact that they host their sites on AWS as a major issue especially with all of the innovation taking place.)
It appears that Nike is encountering issues on every big release and this will severely impact their growth. Unfortunately for the brand they would take a serious hit on their margins if they began to set up their own cloud and server systems. When a company is this big it becomes very difficult to move a site especially when the entire direction of the brand is set up to sell more through digital. It’s a dangerous game for Nike to play and one that if the brand doesn’t begin working on it as their numbers grow and the use of “bots” becomes bigger for more limited products, they could see a considerable amount of damage to their brand long term.
This is important and should be watched.