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When the Shopping Window is Small, Network Failover is Key for Retailers

The National Retail Federation recently released its annual “Back-to-School Spending Surveys” for K-12 and college students. Among the top-line findings:

  • Nearly 24% of Americans stopped buying online because of data breaches, and another 56% reduced the number of sites they use.
  • This year’s back-to-school spending may dip as much as 10% over last year.
  • Total spend should hit about $68 billion, down from $74.9 billion in 2014.
  • College students and their parents will spend 15% less, while K-12 shoppers will spend 7% less.

The Results are In: A Tough School Shopping Season Ahead

In a nutshell, this year’s school buying season will be more competitive than ever, with consumers spending less money at fewer stores, looking for last-minute deals, and watching every penny. What you as a retailer don’t want to add to this mix is network downtime.

According to Gartner Research, every hour of downtime can typically cost an enterprise-scale organization as much as $300,000 per hour. For retail enterprises that make a large chunk of their profit in the run-up to the start of the school year, problems with network connectivity can mean the difference between a profitable year and one that ends in the red. However, lost revenue is just the beginning of the cost of going offline.

Putting a Business Continuity Plan in Place

In preparation for potential network outages, there are a few ways to make sure your retail locations have business contingency plans in place. You can invest in network technology upgrades or add wired redundancy. Or you can take a more long-range path and deploy a 4G LTE failover solution.

Network Upgrades: You can increase your stores’ network availability by installing a T1 line, which can cost nearly 10 times more than a DSL or cable line. Or you can upgrade to a T3 line, which will increase reliability to nearly 99.99% (“four-nines”) but cost you about three times as much as a T1 line.

Wired Redundancy: You can create redundancy for your hundreds (or thousands) of locations by adding a second cable — or even a second T1 or T3 line. Of course, it will be extremely cost prohibitive, not to mention that most wired lines are laid in the same trench. These wired failover lines will be subject to the same physical damage as the primary connections.

4G LTE Failover: Retailers seeking business continuity solutions have unique needs, depending on geographic distribution and the number of locations requiring service. Decision makers should consider the following three criteria when choosing a 4G LTE business continuity solution:

  • Does the solution offer simple, scalable deployment, maintenance and control over hundreds or thousands of distributed locations?
  • Does the router integrate with existing network infrastructure, or provide an all-in-one solution to replace the current router and modem?
  • Does the solution enable various network security architectures, such as virtual private networking (VPN), cloud-based security, network segmentation, and/or parallel networks?

Any of these three approaches can ensure business continuity. However, some will cost more and offer questionable flexibility to prepare your organization for the mobile and wireless trends of the future.

Do You Want To Gain Customers For Life, Or Lose Them?

For businesses hoping to earn brand loyalty from a generation that has grown up expecting always-on connectivity, the cost of reputation is perhaps the most severe. When millennials cannot pull up your site on their smart phone, watch in-store videos, download store coupons in the store or even purchase items without having to wait in lines, you have lost them — perhaps for good. Now, thanks to social media, you just might lose all of their friends.

Calculating the Cost of Downtime

By using average figures, it is relatively easy to arrive at an estimated cost per hour of network downtime. Costs that need to be considered include revenue per hour per employee, internal and/or external costs to troubleshoot and correct the technical problem, cost of employee downtime, and revenue loss per hour. The more difficult figure to estimate is brand damage and customer loss. This cost will generally show up as an overall drop of sales to a new, lower plateau.

Without a Plan, Downtime Happens

Loss of sales, whether for the duration of a network failure or as a new trend, creates a scenario that no enterprise wants to face. However, the fact is that the industry standard for wired line connectivity is only 99.5% availability, which adds up to an unacceptable 4 hours of downtime monthly!

If you don’t have a failover solution for business continuity in place when a backhoe digs up your cable or lighting strikes the pole, the question isn’t if your network connectivity will go down — but what to do when it does.