Toys ‘R’ Us, Costco struggle on Cyber Monday

U.S. shoppers hit Web stores en masse yesterday during so-called Cyber Monday, straining the online systems of some well-known vendors such as Costco, Toys “R” Us, and Yahoo that apparently lacked the computing resources to meet the spike in demand.

Cyber Monday, the first work day after the Thanksgiving holiday weekend in the United States, proved an intense online shopping day, causing some sites’ response times to slow to a crawl and payment systems to malfunction.

Costco, which didn’t respond to a request for comment, faced major performance problems on Monday, according to separate reports from two companies that monitor Web site performance.

Gomez and Keynote separately detected significant performance degradation in Costco’s Web site that made the shopping experience a torturously slow one for people in the United States.

The performance problems at Costco slowed down not only the rendering of its home page, but also processes such as searching for products and placing items on the shopping cart, said Matt Poepsel, Gomez’s vice president of performance strategy.

At its worst point Monday, the Costco home page was taking almost 10 times longer than usual to load — instead of about 3 seconds, people had to wait 32 seconds for it to render completely, Poepsel said.

A multistep process that goes from getting to the home page all the way to creating a one-item order that usually takes a combined 20 seconds, on Monday was taking about 180 seconds, with customers facing nagging delays at every step of the way, he said.

The Toys “R” Us Web site also saw a significant performance degradation Monday, although not as bad as Costco’s, according to separate reports from Gomez and Keynote. Toys “R” Us didn’t reply to a request for comment.

The ToysRUs Web site was up to 300 percent slower than usual at times on Monday, and page download times ranged between 30 seconds and 60 seconds between 1 p.m. and 5 p.m. EST, according to Keynote.

Meanwhile, a Yahoo spokeswoman acknowledged that the flood of online shoppers caused the checkout transaction processing system of its Merchant platform to malfunction, affecting the ability of its stores — mostly small businesses — to close sales. According to this Yahoo status page, the problem began Monday morning and wasn’t solved until almost midnight Pacific Time.

Gomez also reported that TigerDirect’s Web site had performance problems on Monday and took about 24 seconds to load at its worst point. Gilbert Fiorentino, CEO of TigerDirect, acknowledged that the company’s site ran into performance problems for an hour or two on Monday, but said it recovered fully and fairly quickly.

He chalked up the issue to a combination of things, including the day’s overall spike in traffic and particular interest in TigerDirect’s initiative to donate to the Susan G. Komen for the Cure group for fighting breast cancer. The consumer-electronics vendor launched this campaign on Friday and will run it until December 31. Despite the problems, Monday was a very good sales day, he said.

Keynote also saw issues with the site of home improvement and construction products vendor Lowe’s on Monday, a repeat of performance problems the site also faced on Friday. Lowe’s spokeswoman Maureen Rich acknowledged that the company’s site suffered delays Monday, which varied in length depending on when and from where people accessed it. She declined to comment on whether the problems had affected sales.

“We resolved the issue and are investigating what happened,” she said, adding that the site never went down completely at any point in the day.

Keynote also flagged the Web sites of Buy.com for having significant problems with its “checkout” button on Monday and of J. Crew for significantly slow response times. Neither Buy.com nor J. Crew immediately replied to requests for comment.

When a Web site becomes so slow that customers give up on it and leave, the negative effect of the experience goes beyond that particular instance of a lost sale, Poepsel said. The inconvenience and disappointment customers feel erodes their confidence in and loyalty to the company and damages the brand, he said.

This holiday season, Keynote is tracking 30 major retail Web sites, and so far has found that about a third of them had significant performance problems on Friday and Monday when accessed from monitoring points in the United States, said Shawn White, Keynote’s director of external operations.

“A lot of these Web sites have done a good job optimizing their home page, making it fast to download and really capturing that potential customer coming in, but where we see many performance issues is during the shopping experience,” White said.

The problems seem more common among brick-and-mortar retailers that are still trying to perfect their online stores, he said. These vendors aren’t load-testing their sites properly prior to big shopping days such as Cyber Monday, so their systems wobble when there is an extraordinary spike in traffic, White said.

“A lot of traditional brick-and-mortar companies are jumping in on the bandwagon of online shopping this year, more so than any other year, and they really need to understand the importance of Web site performance and availability,” White said.

E-commerce sites were very busy on Monday and Friday, according to Akamai, which tracked usage of more than 300 such sites.

Aggregate traffic from North America to this group of Web sites reached a peak of almost 3 million visitors per minute at around 2 p.m. ET on Monday, a 37 percent increase over 2006’s Cyber Monday. Global traffic hit a peak of 4.6 million visitors per minute, up 30 percent. On Friday, traffic peaked at around 4 million visitors per minute, up from about 3 million on the same day last year, according to Akamai.

Online retail spending hit $531 million on Friday, up 22 percent, while Monday was expected to generate more than $700 million, according to comScore.

On Sunday, Shop.org, the e-commerce arm of the National Retail Federation retailers’ trade group, released the results of a survey forecasting that significantly more U.S. residents would shop online on Cyber Monday this year than last year. The survey predicted that about 72 million people would shop online, compared with a little more than 60 million last year.

This story was updated on November 27, 2007