Retail outages cost $1 mn per hour while AI adoption in observability hits 50%: Report

Retailers are increasingly investing in observability tools to ensure seamless digital operations as the median cost of a critical business outage in the sector has reached $1 million per hour, according to the New Relic 2025 Observability Forecast for Retail and eCommerce.

The study, based on inputs from 147 retail and consumer technology leaders, found that nearly one in three retailers (31%) experience high-impact outages weekly. While retail’s outage costs are lower than the $2 million per hour median seen across industries, the financial hit remains significant, particularly during peak events such as Black Friday or Cyber Monday.

The report noted that retailers detect outages within a median of 30 minutes and resolve them in 42 minutes, faster than most other sectors. However, nearly 60% of engineers spend at least one-fifth of their time managing outages, while 14% dedicate half or more of their time to incident response.

Artificial intelligence has become the top driver of observability adoption, with 50% of retailers identifying it as their main motivation-11 points higher than the global industry average. Retailers are using AI to automate troubleshooting and enhance response times. Other key drivers include security and governance (37%), cost management (32%), and customer experience (27%).

Observability tools are helping retailers protect revenue and customer trust. About 46% of respondents reported a twofold or higher return on investment (ROI) from their observability spending, while 38% said it improved revenue retention through better understanding of customer behaviour.

To improve efficiency, 51% of retailers have consolidated their monitoring tools, reducing the average number from 5.9 in 2022 to 3.9 in 2025.

Speaking about the report, Nic Benders, Chief Technology Strategist, New Relic,“Customers today expect seamless online shopping experiences, which means that business survival depends on operational efficiency and continuous uptime. This year’s Retail & eCommerce Observability Forecast shows that 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.”

The report concluded that retailers using unified observability platforms experience fewer outages, faster resolutions, and stronger ROI, underscoring the growing link between digital reliability, customer experience, and business performance.