Need for Speed: Why latency matters in e-commerce

Slow websites and apps can lead to customer dissatisfaction, lost sales and revenue, and a drop in search engine optimisation (SEO) rankings

New Delhi: With 5G becoming a reality and 6G infrastructure in the works, speed has become an important factor when shopping online. In a survey of more than 2,000 Indian online shoppers, 60% of respondents said they would leave an app mid-engagement if they experienced buffering for longer than 10 seconds. The survey by US-based observability platform New Relic also found that 20% of respondents wouldn’t tolerate more than five seconds of buffering before they abandoned or switched apps.

Clearly, for those selling online, managing latency has become an imperative, simply because the adoption of e-commerce has increased exponentially leading to heightened expectations around it.

Consumers are spoilt due to the advances in technology happening almost every day. “The advent of 5G and a general increase in speed in broadband has led to users expecting a fast and instantaneous loading website/app,” explained Umair Mohammed, ex-CEO at Wigzo, a company by Shiprocket that helps e-commerce enterprises automate their customer engagement.

“For e-commerce, it becomes especially an important issue simply because every visit could potentially be a transaction,” added Mohammed.

“Latency often becomes a prominent issue for retailers during peak traffic periods, such as black Friday, festive season sales, or major product launches when there is a significant surge in site traffic,” New Relic’s Vice President (VP) Sales India Prasad Rai said.

Gifting platform FNP (formerly Ferns N Petals) confirmed Rai’s observation. It admitted to facing latency issues typically during Valentine’s Day, Rakhi, or festive seasons,” said Chirantan Sharma, Product Head, FNP.

Typically, the start-up time of the FNP website is between one second to two seconds with a frame rate of 30-60 frames per second. The network latency is under 100 milliseconds, and resource loading time is under two seconds with interaction latency under 200 milliseconds.

“Our goal is to keep buffering times under 2 seconds, which is in line with industry standards,” Sharma added.

Impact on business

Latency becomes crucial for e-commerce businesses as it can lead to customer dissatisfaction, lost sales and revenue, and a drop in search engine optimisation (SEO) rankings.

For FNP, which uses Amazon Web Services (AWS) as the hosting platform, latency is critical as it directly affects user experience, engagement, and conversion rates. Ensuring low latency is not just a technical necessity but critical for customer satisfaction and retention, added Sharma.

Software company Gigaspaces said that over 10 years ago, e-commerce giant Amazon identified that every 100 milliseconds of latency cost it 1% in sales. Similarly, in 2006, even Google realised that an extra 0.5 seconds in search page generation time led to a 20% drop in traffic.

Different studies highlight that a website’s speed is directly proportional to the conversion rate with the same increasing by 1.05, 1.1 or even 1.2 times with the rise in site performance.

Milliseconds make millions, as per professional services firm Deloitte. In a study conducted by the company, a 0.1-second speed improvement in mobile sites led to an increase in retail conversions by 8.4% with an average order value increase of 9.2%.

That’s why global companies like Google, SportsShoes.com, and eBay work on latency issues to help increase their conversion rates. In 2019, California-based eBay implemented a series of performance improvements to enhance site speed, which it calls ‘Speed by a Thousand Cuts’, the company blog said.

UK-based sportswear brand Sportsshoes.com with the help of UK-based digital marketing agency Propellernet experimented to understand the impact of load times on conversion rates. Utilizing its real user measurement (RUM) tool, Propellernet collected precise data on SportsShoes.com’s site performance. The findings revealed that visits with faster-than-average loading times were 34% more likely to result in conversions compared to slower-than-average visits. When specifically examining mobile visits, the likelihood of conversion increased even more, reaching 41% for faster-than-average mobile visits.

Measures to minimise delay

E-commerce companies deploy several techniques to ensure speed. These include:

• Focusing on the ease of use and load times before building functionalities over functionalities.
• Ensuring that companies use a CDN (content delivery network) to maximise speed.
• Unloading the heavy images/javascript from the website.
• Regular performance monitoring.
• Optimising websites/ app infrastructure.
• Being vigilant on potential slowdowns during updates.
• Using responsive design, compressed images and files.
• Employing lazy loading techniques.
• Ensuring hosting solutions can handle traffic demands.
• Technologies like observability tools.
• Expanding database inventory during high-traffic periods
• Adding virtual machines (VMs) to an existing cluster of computers to support load.

Keeping loading time under two seconds is what retailers aim at considering the competition, emergence of infrastructure and customer expectations. However, researchers say that even a 100-millisecond delay can hurt conversion rates by over 7-10% and anything over two seconds can increase bounce rates by 103%.

With time, the need for speed will gradually increase as new-age connectivity infrastructure like 6G, satellite-based communications like Starlink from SpaceX, Project Kuiper from Amazon and Taara by Google are already in the works. And brands wanting to sell online will do well to never lag on this front.