A single hour of downtime for an eCommerce platform can lead to a loss of up to $300,000 in revenue.
With the holiday season here already, both global and Nigerian eCommerce platforms are already seeing high demand. This period brings high-stakes pressure to retailers as consumers rely more on online stores for shopping.
In the US alone, online sales reached $288.8 billion in the third quarter of 2024, a 7.46% increase year-over-year (YoY) from the third quarter of 2023.
Meanwhile, Nigeria’s eCommerce market, valued at $8.53 billion in 2024, is projected to reach $14.92 billion by 2029, with a compound annual growth rate (CAGR) of 11.82% during the forecast period.
This surge reiterates how much eCommerce is becoming indispensable, particularly during peak shopping seasons.
However, with the holiday rush, it’s a big wonder if technology can keep up with the high demands of holiday shoppers, or are cracks starting to show under the weight of consumer expectations? Millions of shoppers converge on online stores, pushing the system to its limits. Any glitch, any hiccup, can have catastrophic consequences.
The Pressure on eCommerce Platforms
Over 40% of annual retail sales occur between Thanksgiving and Christmas globally and Nigerian platforms like Jumia have seen commendable growth. Jumia recently reported an 18% year-on-year increase in orders during the 2024 holiday season which is just starting. Imagine the percentage increase by year-end!
But while demand surges, so too do consumer expectations. In both the US and Nigeria, shoppers are now accustomed to fast deliveries, often within 24 to 48 hours, and seamless checkout.
Research reveals that 70% of online shoppers abandon their carts due to poor user experience, while in Nigeria, 45% of consumers would switch platforms if delivery times exceed expectations.
For retailers, the stakes are high—failure to meet these expectations can result in lost sales, customer trust, and irreparable damage to a brand’s reputation.
The need for operational efficiency has never been more important, as tech infrastructure limitations, supply chain disruptions, and cybersecurity issues threaten to obstruct smooth operations during the busy holiday season.
Challenges in Meeting Holiday Demands
Tech Infrastructure Limitations: Server overloads, slow website speeds, and outages are common during peak shopping periods. Last year’s Black Friday saw lots of disruptions, with Amazon experiencing intermittent outages as servers were unable to handle traffic peaks.
In Nigeria, platforms like Jumia have faced similar issues, with users reporting delays in page load times and failures in processing transactions. The holiday surge often exceeds bandwidth capacity, causing slowdowns and customer frustration. This is why scalable, efficient infrastructure is required.
Supply Chain Disruptions: The global supply chain problem, worsened by the pandemic and logistical challenges, has made it more difficult to meet the rising demand for products.
In 2023, more than 60% of global supply chains faced delays, leading to out-of-stock situations for major retailers.
Platforms like Konga had delays in shipments from overseas suppliers, affecting the timely availability of high-demand goods such as electronics and fashion. Local delivery systems in Nigeria are also under pressure, with shipping times increasing by 20% during the holiday season, according to a report by the Nigerian Shippers’ Council.
Cybersecurity: The holidays also bring risks of cyberattacks, including data breaches and fraud. Last year, more than 500 million online accounts were compromised globally during the holiday shopping season. In Nigeria, the rise of digital payment fraud has led to increased cybersecurity anxieties.
During the holiday season, cybersecurity agencies, including Nigeria’s National Cyber Security Centre (NCSC), often issue warnings about an increase in fraudulent activities in eCommerce transactions.
This period is particularly vulnerable to cyber threats due to the high volume of online transactions, making individuals and companies more vigilant about the safety of online payment systems, and investing in more secure payment gateways.
AI and Personalisation Challenges: Personalisation technologies, including recommendation engines and dynamic pricing algorithms, are mostly unable to keep up with increased traffic. Reports reveal that nearly 40% of eCommerce websites experienced issues with AI algorithms during peak periods, causing pricing errors or incorrect recommendations. While recommendation engines of eCommerce platforms are improving, they struggle to scale effectively during the busiest shopping times.
Technology’s Role in Overcoming Challenges
Even with these challenges, technology is going beyond to ensure eCommerce platforms can meet the demands of holiday shoppers.
AI and Personalisation
AI, on the other hand, is being leveraged to enhance customer experiences. Personalised shopping through recommendation engines and targeted ads boosts satisfaction and drive sales. AI-driven chatbots are handling customer service inquiries efficiently, particularly during peak shopping times.
Automation in Warehousing and Logistics
Robotics and automation are enhancing warehouse operations, with AI-powered robots speeding up order fulfilment and automated sorting systems reducing processing time. Added to these, innovations such as drones and autonomous vehicles are being tested for last-mile delivery, improving delivery speed in urban areas.
Cloud Infrastructure for Scalability
To address server overloads and traffic surges, companies like Amazon and Nigerian platforms like Jumia are investing heavily in cloud infrastructure. Amazon’s AWS, for example, dynamically adjusts resources based on demand, while others have expanded their server capacity to manage increased traffic. Alibaba’s use of AI, robotics, and big data during Singles’ Day showcases how technology can handle massive spikes in transactions.
These improvements help to prevent slowdowns and outages that could lead to lost revenue.
AI-Driven Supply Chain Optimisation
AI-driven solutions are also aiding in inventory management and demand forecasting, helping platforms better predict customer demand and ensure stock availability. This has been a game-changer in reducing stockouts.
Platforms have implemented similar technologies, investing in AI for real-time inventory tracking and predictive analytics. During peak sales events like Black Friday, Jumia faced logistical challenges but responded by improving its partnerships with local couriers and enhancing its delivery tracking systems.
Cybersecurity Measures
The holiday season is notorious for cyberattacks, with the rise of digital payment fraud and data breaches. In Nigeria, over 35% of eCommerce transactions during the holiday period are flagged as potentially fraudulent. To tackle this, platforms are investing in more secure payment gateways and strengthening their cybersecurity protocols to safeguard customer data and maintain trust.
Advancements in Logistics Tech
Innovations like drone deliveries, automated warehouses, and real-time tracking are enhancing logistics capabilities. Globally, Walmart is using drones to expedite deliveries of small items, while companies like DHL and UPS are optimizing routes with AI-powered logistics platforms. In Nigeria, logistics startups like Max.ng are piloting drone deliveries in Lagos to handle last-mile delivery and reduce congestion in urban areas.
Enhanced Customer Experience Tools
AI-powered chatbots and the integration of AR/VR are enhancing the shopping experience. Companies like Shopify are using AI to offer personalised shopping experiences, while some other platforms are exploring virtual try-on technologies for fashion and beauty products.
Companies have learnt from past holiday seasons when it comes to handling high demand. For instance, in 2022, Amazon’s infrastructure had some issues during Black Friday, but the company quickly scaled its cloud capacity and implemented predictive analytics to avoid similar issues in 2023. Similarly, Jumia has learned the importance of proactive logistics planning and clear customer communication.
Emerging Technologies and eCommerce
Emerging technologies like blockchain for secure transactions, quantum computing for better demand forecasting, and advancements in drone deliveries can further bolster eCommerce.
In Nigeria, blockchain is being explored to improve transparency in supply chains, while some platforms are adopting eco-friendly delivery methods to reduce their carbon footprint.
These innovations can simplify processes, reduce fraud, and improve overall shopping for users. Quantum computing could boost demand forecasting and inventory management by processing large amounts of data more efficiently.
Companies globally are experimenting with blockchain to improve transparency in supply chains, ensuring customers are informed about product sourcing and delivery times.
Reducing Carbon Footprint
With growing consumer awareness of environmental issues, platforms are under pressure to reduce their carbon footprint. Companies like Amazon are investing in electric delivery vehicles to lower emissions, and some Nigerian platforms are working with eco-friendly delivery startups to offset carbon emissions during peak shopping periods.
According to a report by the Nigerian Business Council, eCommerce platforms are considering environmental impact when selecting logistics partners.
The holiday shopping season is a hot one for retailers, eCommerce platforms, and technology providers. With demand surges, the question about eCommerce platforms and supporting technologies meeting these expectations, or the system causing some limitations during the holiday rush could be tied to efficiency in every process involved.
What do you think—are eCommerce platforms ready for the holidays, or do you foresee some hiccups this season?
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