Black Friday can potentially provide the retail sector with rapid returns and invaluable sales, but infrastructure challenges continue to impact on uptime, service delivery and security. Greg Hatfield, Vice President – Infrastructure Solutions at Dimension Data, looks at how the right architecture can fundamentally change this complexity and support retailers as they face even greater volumes of traffic in 2023 and the future.  

In the late ’60s, the Friday following Thanksgiving began to mark the beginning of the Christmas shopping season – and the beginning of massive festive season sales. The popularity of this US tradition has steadily grown and these annual sales have now become a global retail phenomenon.

Black Friday, along with the accompanying Cyber Monday, promise unprecedented sales opportunities for businesses of all shapes and sizes; particularly ecommerce retailers. That is, of course, if they’re able to provide their customers with outstanding service and ensure a smooth shopping experience.

The evolution of ecommerce’s biggest day in South Africa

The increase in online sales volumes are in line with the steady increase we’ve seen in ecommerce sales numbers in recent years. Post-pandemic, 71% of South Africans have embraced online shopping and the ecommerce market is expected to reach a value of R400 billion by 2025.

In 2021, we saw more shoppers head to physical stores as they stepped out from under the restraints of the pandemic. Mastercard noted that Black Friday sales increased 12.15% year-on-year globally, while various South African banks reported significant increases in card activity compared to previous years.

Despite increased pressure on consumers, there was no sign of a slowdown in 2022. Standard Bank reported an increase of nearly 19% in customer transactions on the day compared to 2021. 

FNB reported that its customers spent a whopping R3 billion both in stores and online during last year’s sales. While in-store spending increased by 18%, the value of online purchases increased by 31%.

Nedbank said that its acquiring volumes jumped by 38% from the previous year. It also noted that it saw an 88% increase in the number of online transactions on Black Friday 2022, compared to a 30% rise for in-store purchases.

These numbers are a clear indication of the massive opportunity that this period presents for ecommerce businesses. Yet, many South African businesses were grappling with the harsh realities of outdated infrastructure and the lack of resilient architecture. 

The Black Friday landscape: challenges and opportunities

As was the case last year, 2023 promises to be one of the biggest ever for Black Friday sales. Predictions suggest that retailers could see a 25% uptick in the value of ecommerce sales made on the retail holiday. Which would see online retail surpass in-store retail figures for the first time.

However, retailers have to overcome some very real challenges. While retail sales surge and online shoppers spend, many Black Friday experiences involve downtime, lost deals and customer frustration. 

Systems aren’t built to handle the intense demand on the day because companies don’t have resilient architecture capable of handling sharp bursts and radical spikes in usage. There are two reasons for this:

  • The slow adoption of ecommerce in South Africa
  • Inadequate infrastructure

These two factors are interlinked. As consumers didn’t really have the desire to shop online, businesses were slow to develop their ecommerce sales platforms. That meant that businesses were ill-equipped to handle the sharp increase in online shopping that we saw at the outset of the pandemic. 

This continues to be a major issue for many retailers. And the issue only compounds with time.

The opportunity cost of downtime to implement upgrades seems massive, but failing to restructure systems to ensure that they meet consumers’ changing needs can be even more expensive. 

Online retail’s most critical success factor is customer service. According to a study by Microsoft, 58% of consumers will stop interacting with a business because of poor customer service. So, when things go wrong and customers no longer feel the love, there’s a big chance that you’ll never see them again. 

Robust infrastructure empowers ecommerce success

In the past, it was a challenge to get companies to recognise the value of technology investment and the cloud. However, there is now plenty of research highlighting the importance of meeting consumer expectations when it comes to online shopping.

The Online Retail in South Africa 2022 study, conducted by World Wide Worx in collaboration with Mastercard, revealed that online retail in South Africa grew by 35% in 2022, bringing the total value of the sector to R55 billion.

As Black Friday cements itself as a landmark sales opportunity on every calendar, companies in the retail sector need to revitalize their systems so they are capable of withstanding the onslaught. 

Businesses now understand that they cannot afford for their sites to be down on the busiest day of the year. Fortunately, the solution does not lie in expensive hardware and infrastructure that eat into resources every other day of the year – it sits in the cloud; specifically the multi-cloud. 

Cloud-based infrastructure and an enabling network are transformative forces for ecommerce businesses, offering:

  • Interoperability: A self-healing, self-learning platform that ensures coordinated behavior across various components to eliminate silos.
  • Efficiency: Automation of network configurations, reducing human intervention to keep costs down and ensure rapid response to market changes.
  • Security: Robust systems that safeguard businesses against ever-evolving cyberthreats and enhance the customer experience.
  • Scalability: On-demand access to services, optimizing the user experience during busy periods while containing costs.

The right network and cloud infrastructure will ensure that systems function seamlessly and scale perfectly, flexing in tune to demand while keeping systems up and sales ongoing.  A multi-cloud infrastructure within a single heterogeneous environment means that retailers can select the services they need and scale these up or down as required. 

The added bonus is, of course, that the cost of this agility isn’t prohibitive because the company is charged based on use, not on idle infrastructure. 

In today’s ecommerce landscape, the traditional approach to purchasing hardware is not feasible. Your strategy needs to shift to cloud, where you can effectively rent the required capacity for only the hours that you need it. You also need an adaptable network that can accommodate your fluctuating consumption.  

The challenge is that nobody knows how much traffic they are going to get, so there is a huge amount of uncertainty on the capacity you will require. 

Planning for that uncertainty with cloud is advantageous because it has the ability to automatically scale to the capacity required, based on the hits that you’re getting on your website from customers wanting to buy from you. 

Automatic scaling eliminates the frustrations of outages that can cause a lot of unintentional damage on brands.

Collaborating with experts for scalability, reliability and innovation

It's worth collaborating with a managed services provider that can help you to assess which architecture environment is right for the business. 

Your provider of choice should be able to assist you in migrating your site and optimizing the cloud environment for you, and underpinning this strategy with a robust and automated network solution. What’s more, they should also be able to guide you in your choice of Cloud venue – such as AWS, Azure, or a local virtual private Cloud. 

It’s important that you modernize the application to ensure you are using the new microservices architecture that people want. In addition, you’ll want to modernize your database and architecture to be able to scale automatically. 

Your managed services consultant should be able to do all of this for you or at least assist you with executing these changes by augmenting your staff who are developing your website. 

A good system integrator and managed security services provider will also help you manage and mitigate security vulnerabilities. They should look at your business requirements, exposures and risks that you’re trying to protect against – and the reasons why you’re opting for cloud adoption. 

They should also help you to choose the correct controls and recommend the technology to be applied in your environment, to ensure you as the client are secure.  

Looking at the sustained increases in ecommerce sales in recent years as well as projections for the future, it’s clear that ecommerce in South Africa will continue to grow and mature. Retailers can no longer afford not to invest in their online strategy and platform. 

With the opportunities that exist – and Black Friday close on the horizon – the time is right to ensure your company’s online presence is robust and agile, able to manage complex processes and high traffic volumes, and is secure enough to protect your business and customers.

NTT and Dimension Data: revolutionizing ecommerce with intelligent infrastructure services

From the need for seamless, secure and agile networks to the demand for continuous transformation to keep up with changing consumer demands, the challenges faced by ecommerce retailers are multifaceted. 

In this ever-evolving landscape, digital transformation and rapid adaptation are imperative. This is where NTT and Dimension Data’s infrastructure services come into play. Our smart, scalable and reliable systems empower ecommerce retailers to meet and exceed customer expectations.

By leveraging our expansive portfolio of connectivity solutions, we are able to support even the most demanding software-defined, high-performance infrastructure.

Unmatched scalability allows you to shift capacities based on demand to ensure a superior user experience during peak times. Bandwidth can be scaled up or down based on predefined thresholds to support sales, contain costs and mitigate losses.

With 13 data centers and more than 100 carrier service providers across Africa, over 600 gigabytes of international high-speed bandwidth available and the ability to move 75 gigabytes of data per second, we offer an exceptionally responsive and reliable network.

Our global footprint means that you will gain access to a global network of products, all delivered locally to accelerate innovation. 

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