A new report finds that while tool fragmentation persists in the US retail industry, observability provides significant business value for retailers.

From the 172 respondents, many reported $5m in total value per year from their observability investments, with a minimum doubled median annual return on investment (ROI).

US retail sales, excluding automotive, are projected to experience a 3.7% year-over-year (YOY) increase during the upcoming holiday season running from 1 November to 24 December.

With billions of dollars of consumer spending on the line, it is critical for retailers and consumer-focused organisations to focus on their digital customer experience (DCX) strategies and create a seamless, omnichannel customer journey.

To create successful digital storefront experiences and keep customers engaged, companies are investing in observability tools that give them visibility into their Software across their often-complicated technology stacks.

Retailers tended to spend more on observability than most other industries as almost half (49%) said they spend $500,000 or more and 31% said they spend $1m or more per year.

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By GlobalData

The cost of outages for retailers

Outages leave retailers at risk for considerable downtime, which can make a big impact during peak shopping seasons, like Black Friday. The research shows retailers experienced high-business-impact outages at a higher frequency than other industries, with 37% reporting these outages at least once a week compared to the average of 32%.

In addition, more than half (55%) of retail/consumer respondents noted it takes at least 30 minutes to detect high-business-impact outages and 61% indicated it takes at least 30 minutes to resolve them.

Notably higher than the annual outage cost across all other industries, there’s a significant monetary impact from critical business app outages. Respondents reported a median annual outage cost of $9.95m.

More than half (69%) of respondents are toggling more than four observability tools—in an effort to understand the different aspects of their business. This slows down engineers, making it take longer to find outages, which leads to higher outage costs and poor customer experiences.

What does observability provide for retailers?

In terms of the monetary value of observability, more than half (57%) of respondents noted more than $500,000 in total annual value, 43% said the total annual value is $1m or more and 21% estimated they receive $5m or more per year in total value.

Nearly half (42%) of respondents said their organisation is likely to consolidate tools in the next year to get the most value out of their observability spend. The prevailing preference among retail and consumer respondents is for a single, consolidated platform (46%).

In the coming years, 52% of retailers are expecting to deploy synthetic monitoring, 42% are expected to deploy mobile monitoring and 39% for browser monitoring.