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Prepare Your Site for the Holiday Madness
By Alexis Gutzman
November 8, 1999

Q: How do you recommend I estimate holiday traffic?

A: I'm glad to see you're doing capacity planning for your site. This year's online holiday shopping is expected total $4 billion, according to Forrester Research, Inc. Other sources think it will be even higher. Market researcher Jupiter Communications even predicted that only 10% of e-commerce sites are adequately prepared to handle the doubling of this year's holiday shopping transactions, otherwise known as X99. (That's short for X-mas '99.)

If you're planning on getting your e-commerce site ready for this year's holiday online shopping blitz, then the first thing you'll need to do is decide on a method of estimating your site's traffic. The best place to begin is by examining some of your site's historical data.

Select a Method for Estimating Traffic
There are several ways to go about estimating anticipated traffic.

• Growth from third-quarters between 1998 and 1999, applied to fourth-quarter 1999. You can estimate traffic growth from last year (1998Q3 to 1999Q3), then project out traffic based on that that growth number times 1998Q4. Of course, that means you need to have been in substantially the same business in 1998, and have access to good traffic data from 1998.
• Base traffic plus traffic associated with Q4 marketing/promotions. If your business has changed too much from this time last year, or you didn't have much of a business at this time last year, then you can base your traffic estimates on Q3 traffic, adding traffic based on any marketing or promotions you're doing for the holidays. You should have some idea what the response or click-through rate is for your promotions, and your best bet may be to scale up from 3rd quarter based on that.
• Base traffic plus a percentage of Internet holiday sales. All those shopping dollars are going to go somewhere. Calculate your share of the Net's revenues for any period in the past year, and multiply it by $13 billion or $16 billion, to see the traffic you should expect to see if all else were to remain equal.
• Traffic based on sales you'd have to generate to meet Q4 or 1999 goals. Remember that business plan where you estimated revenue for the quarter or year? Pull it out. Unless this estimate would be too conservative, based on your sales for previous quarters, I recommend you estimate traffic and load based on your revenue goals. If you're not a one-man shop, someone somewhere else in the company is doing everything in his or her power to make sure you meet your goals, so give that person the benefit of the doubt, and test assuming that you will meet your goals.

Traffic Based on Sales You'd Need to Meet Your Goals
You know how many sales you need to meet your Q4 goals, or at least you know what the total revenue needs to be. To convert that into individual sales, then into traffic, you need to know (and probably can find out from someone else in the company) what your average basket or shopping cart (order size) is. How much does the average customer spend? BizRate.com publishes a quarterly report that lists average basket size by industry. If you don't know yours, look into their (expensive, but worth it,) report.

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