In the latest test of holiday shopping this weekend, Virgin Megastore's online site crashed before a touted Labor Day sale could even kick in, shutting out customers for hours. Meanwhile, Amway's sister site, Quixtar, was largely inaccessible after its launch last week. And outage-plagued eBay's site went down over the weekend for hours again, further frustrating the leading auctioneer's users.
Such troubles could spell opportunities to rivals if they aren't fixed fast, according to analysts. "There's going to be zero tolerance for site delays," said e-commerce analyst Seema Williams of Forrester Research. "Competitors are going to make out like bandits," she said.
These troubles come as Forrester Research predicts consumers to spend $8 billion online during the fourth quarter of this year, compared with $3.5 billion last year. Of the seven million households that will begin shopping online this year, Williams expects up to 50 percent to start this holiday season.
While Net veterans may be more likely to tolerate delays and difficulties, novices may not have that same kind of patience, according to Jupiter Communications analyst Cormac Foster.
"They don't know it's supposed to be slow," Foster said. "They don't necessarily consider it OK to hit reload 15 times to get it to work," he said.
And with the proliferation of message boards and customer review sites such as Deja.com, future customers can easily share bad experiences across the Net.
"Word spreads very rapidly on the Web," said Charles Gerlach, director of e-commerce strategy at market research company Mainspring Communications. "If you're not providing customers what they want, they find out quickly enough," he said.
Outages inevitable for novice e-tailers
Though last season's high-profile Web site crashes or slowdowns at such hot sites as Toys "R" Us and Buy.com served as a lesson for some e-tailers, analysts expect a whole new crop of sites to collapse under pressure of overwhelming traffic this year.
Yankee Group e-commerce analyst Scott Smith said competitive pressures and time constraints can cause companies to cut corners when developing a site. And in many cases, technology has not evolved to handle bursts of customer traffic--while servers and applications just can't handle the load.
"There's no blueprint for this," he said. "There's no history of launching a Virgin Megastore [online]. The applications are buggy and fragile, integration work is being done for the first time."
Even companies with large data centers that host corporate sites are having a tough time keeping up with bandwidth and hardware demands, he said.
"For every site that's stabilized, another one is destabilized," he said. It takes experience and knowledge to teach companies how to cope online, he said.