The Cost of Network Downtime Extends Beyond the Bottom Line
A reliable internet connection is every retailer’s lifeline. When network downtime occurs, it costs retailers more than just missed sales, as retailers rely on fast and stable internet to operate point-of-sale systems, security systems, inventory databases, digital signage and more.
To better understand the true impact of downtime for retailers, Accelerated Concepts, a Digi International company, conducted a research study, The Cost of Downtime: Beyond the Bottom Line, surveying retail managers and supervisors from big-box retailers and department stores on business productivity and sales related to connectivity. Here are a few key findings from the study.
To Close or Not to Close? That is the Question During a Network Outage
Despite recent advancements in network infrastructure, the survey revealed that the overwhelming majority of retailers still experience unexpected connectivity outages at least once a year. While 72 percent of retailers surveyed indicated sales were lost during network downtime, the study also found that downtime severely impacts customer loyalty, employee productivity and overall business operations.
The majority of respondents reported when the network is down, it can take up to four hours to get back in service. So, what’s a retailer to do when they experience a network outage? Close? Remain open? Wait for help?
Most retailers surveyed noted they would close within two hours, and less than a quarter said they would stay open the whole day waiting for support. If choosing to remain open, retailers are limited with their operations and the costs can outweigh the revenue earned during an outage. For instance, without a connection, 61 percent of retailers can’t process credit cards, nearly three out of four cannot run loyalty programs, more than 70 percent cannot utilize in-store digital signage, and more than half of retailers see a decrease in employee productivity.
Long-Term Impacts of Network Downtime
Unplanned outages are a short-term issue for IT departments, but for a business owner, outages have long-term effects. The study found that more than half of retailers cannot enable security systems while disconnected from the internet, leaving themselves vulnerable to data breaches. Since retailers hold personal and sensitive customer data, any downtime they experience presents a major security risk.
In addition to security risks, 82 percent of respondents said that network downtime can also result in a negative customer experience, with almost one in three retailers reporting that their brand reputation becomes damaged due to an outage.
Retailers set expectations with their customers regarding the level of service they can deliver, so if an outage occurs and the store can’t deliver on those expectations, customers are more likely to take their business elsewhere or express their dissatisfaction publicly. Because of social media, word about a store’s downtime can reach across the globe in a matter of minutes.
Despite both the number and severity of the long- and short-term consequences of downtime, the study surprisingly found that 20 percent of respondents still don't have backup connectivity solutions in place in the event their primary source goes down, proving that not all retailers understand the true impact of downtime to their businesses.
As the days of using a piece of paper to track inventory and sales are behind us, and more technologies like POS and security systems require a strong, secure network to function, retailers have the opportunity to proactively prepare for interrupted network connectivity and avoid the side effects of downtime. By implementing backup and failover systems, retailers can proactively implement solutions to ensure business continuity and maximize uptime, ensuring the consequences of downtime become a thing of the past too.
Tom Butts is vice president, product management, network for Accelerated Concepts, a Digi International company.
