AI drives surge in observability investments as retailers seek to cut downtime and protect revenue during peak shopping seasons
Retailers are increasingly investing in observability tools to ensure smooth digital experiences and minimise costly outages, as retailers lose a median of USD 1 million for every hour of downtime. The impact remains steep during high-traffic events like Black Friday or Cyber Monday as per New Relic’s reports.
The report, based on a survey of 147 retail and consumer IT leaders, found that nearly one in three retailers face critical outages every week.
“Downtime is not just a technical problem—it’s a brand and revenue problem. As AI becomes core to retail operations, observability gives teams the necessary visibility and confidence to keep every checkout smooth, every experience seamless, and every second of peak shopping protected”, said Nic Benders, Chief Technology Strategist, New Relic.
Engineers spend significant time tackling downtime, with 60 per cent saying they devote at least a fifth of their time to managing outages, while 14 per cent spend half or more. Median outage detection and resolution times stand at 30 and 42 minutes, respectively.
To curb such losses, 46 per cent of retailers reported at least 2x returns on their observability investments, citing improved uptime, operational efficiency, and better revenue retention. Thirty-eight per cent also credited observability with improving customer loyalty through deeper behavioural insights.
As artificial intelligence becomes core to retail operations, AI is emerging as the biggest driver of observability adoption, cited by half of respondents, 11 points above the all-industry average. Other key motivators include security, compliance, cost control, and customer experience management.
Retailers are also consolidating their tech stacks for end-to-end visibility. Over half have reduced the number of tools from an average of 5.9 in 2022 to 3.9 today, while 50 per cent plan further consolidation within a year.
