5 Takeaways from the Observability Forecast for Retail and eCommerce

Nic Benders
New Relic
Learn more about New Relic

Seeing is believing, or in this case, seeing is understanding, according to New Relic's 2025 Observability Forecast for Retail and eCommerce report. Retailers who want to provide exceptional customer experiences while improving IT operations efficiency are leaning on observability.

As economic pressures intensify and customer expectations rise, the retail industry is undergoing a reset. To protect margins and deliver seamless omnichannel experiences, retailers must improve the efficiency and reliability of their IT and digital operations while also managing against complexity created by AI. Drawing on insights from 147 retail and eCommerce leaders, this report reveals how retailers use observability and key benefits.

Here are five key takeaways from the report:

1. AI shapes observability priorities

The data shows that 50% of leaders identified AI as the primary driver of deploying observability platforms in the retail and eCommerce industries. As retailers adopt AI to better connect with shoppers and personalize their experiences, the complexity of their digital estate increases by introducing new models, data pipelines, and dependencies that must be monitored alongside existing applications.

Beyond AI, retailers also cite governance, risk, compliance, cost management, and customer experience management as key drivers of observability adoption, reflecting the need for end-to-end visibility across increasingly interconnected systems.

2. Outages are a costly business risk

Outages are not just IT incidents; they are a business risk that can damage a brand. The report found that 31% of retail organizations report experiencing high-impact outages weekly. Retailers remain quicker than most industries at detecting outages, with a median time to detection of 30 minutes, yet the damage can still be devastating. The financial impact of outages is profound, with respondents citing a median cost of a critical business outage at $1 million per hour.  

Downtime, however, is only one part of the equation. Nearly 60% of respondents recognized that their engineering teams were losing innovation opportunities due to outages and incident response. Reducing incident frequency and downtime allows teams to redirect efforts toward innovation and business growth.

3. Digital experience monitoring is mission-critical

Monitoring offers insights into the digital customer experience and any issues that could impact it. To support seamless, omnichannel journeys, retail organizations are deploying a range of monitoring capabilities that keep customers engaged across every touchpoint. Specifically, they have prioritized database monitoring (67%), network monitoring (66%), alerts (65%), and dashboards (63%). Security also ranks highly, with 61% indicating they have deployed a security monitoring platform.

That focus on deeper visibility now extends to AI-driven systems, with AI monitoring adoption rising from 35% in 2024 to 55% in 2025.

4. Tool consolidation gains momentum

Retail organizations continue to consolidate observability tools to improve visibility across the software stack, prevent incidents, and increase operational efficiency. In 2025, the number of tools retail organizations used dropped from 5.9 just three years ago to 3.9. At the same time, complexity remains a persistent challenge, with 37% of respondents citing complex tool stacks as their primary obstacle to achieving full-stack observability. Having too many tools and the tools being too expensive fall closely behind as the next cited obstacles. This shift reflects a broader push to reduce tool sprawl as retailers manage increasingly distributed, omnichannel environments with fewer resources and tighter margins.

5. Observability makes life better (and provides business value)

For IT decision makers, observability delivers value beyond incident response. 41% of respondents said the technology helps satisfy key performance indicators (KPIs) while 36% said it drives business strategy. In-the-trenches practitioners said it increased productivity, enabling them to find and resolve issues faster (55%). It also reduced the guesswork associated with complex tech stacks (31%).

44% of respondents also noted observability increases operational efficiency, while another 43% reported improvements in system uptime and reliability.

Notably, observability is also delivering clear financial returns. Nearly half (46%) of retailers report an ROI of 2x or higher from their observability spend, reinforcing its role as a core business investment.

Retailers cannot afford business downtime or abandoned shopping carts due to poor customer experiences. As retailers navigate tighter margins, rising customer expectations, and increasingly complex digital environments, observability is proving essential for delivering resilience, efficiency, and business value.

Nic Benders is Chief Technical Strategist at New Relic

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5 Takeaways from the Observability Forecast for Retail and eCommerce

Nic Benders
New Relic
Learn more about New Relic

Seeing is believing, or in this case, seeing is understanding, according to New Relic's 2025 Observability Forecast for Retail and eCommerce report. Retailers who want to provide exceptional customer experiences while improving IT operations efficiency are leaning on observability.

As economic pressures intensify and customer expectations rise, the retail industry is undergoing a reset. To protect margins and deliver seamless omnichannel experiences, retailers must improve the efficiency and reliability of their IT and digital operations while also managing against complexity created by AI. Drawing on insights from 147 retail and eCommerce leaders, this report reveals how retailers use observability and key benefits.

Here are five key takeaways from the report:

1. AI shapes observability priorities

The data shows that 50% of leaders identified AI as the primary driver of deploying observability platforms in the retail and eCommerce industries. As retailers adopt AI to better connect with shoppers and personalize their experiences, the complexity of their digital estate increases by introducing new models, data pipelines, and dependencies that must be monitored alongside existing applications.

Beyond AI, retailers also cite governance, risk, compliance, cost management, and customer experience management as key drivers of observability adoption, reflecting the need for end-to-end visibility across increasingly interconnected systems.

2. Outages are a costly business risk

Outages are not just IT incidents; they are a business risk that can damage a brand. The report found that 31% of retail organizations report experiencing high-impact outages weekly. Retailers remain quicker than most industries at detecting outages, with a median time to detection of 30 minutes, yet the damage can still be devastating. The financial impact of outages is profound, with respondents citing a median cost of a critical business outage at $1 million per hour.  

Downtime, however, is only one part of the equation. Nearly 60% of respondents recognized that their engineering teams were losing innovation opportunities due to outages and incident response. Reducing incident frequency and downtime allows teams to redirect efforts toward innovation and business growth.

3. Digital experience monitoring is mission-critical

Monitoring offers insights into the digital customer experience and any issues that could impact it. To support seamless, omnichannel journeys, retail organizations are deploying a range of monitoring capabilities that keep customers engaged across every touchpoint. Specifically, they have prioritized database monitoring (67%), network monitoring (66%), alerts (65%), and dashboards (63%). Security also ranks highly, with 61% indicating they have deployed a security monitoring platform.

That focus on deeper visibility now extends to AI-driven systems, with AI monitoring adoption rising from 35% in 2024 to 55% in 2025.

4. Tool consolidation gains momentum

Retail organizations continue to consolidate observability tools to improve visibility across the software stack, prevent incidents, and increase operational efficiency. In 2025, the number of tools retail organizations used dropped from 5.9 just three years ago to 3.9. At the same time, complexity remains a persistent challenge, with 37% of respondents citing complex tool stacks as their primary obstacle to achieving full-stack observability. Having too many tools and the tools being too expensive fall closely behind as the next cited obstacles. This shift reflects a broader push to reduce tool sprawl as retailers manage increasingly distributed, omnichannel environments with fewer resources and tighter margins.

5. Observability makes life better (and provides business value)

For IT decision makers, observability delivers value beyond incident response. 41% of respondents said the technology helps satisfy key performance indicators (KPIs) while 36% said it drives business strategy. In-the-trenches practitioners said it increased productivity, enabling them to find and resolve issues faster (55%). It also reduced the guesswork associated with complex tech stacks (31%).

44% of respondents also noted observability increases operational efficiency, while another 43% reported improvements in system uptime and reliability.

Notably, observability is also delivering clear financial returns. Nearly half (46%) of retailers report an ROI of 2x or higher from their observability spend, reinforcing its role as a core business investment.

Retailers cannot afford business downtime or abandoned shopping carts due to poor customer experiences. As retailers navigate tighter margins, rising customer expectations, and increasingly complex digital environments, observability is proving essential for delivering resilience, efficiency, and business value.

Nic Benders is Chief Technical Strategist at New Relic

Related Links

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Production incidents rarely announce themselves as database problems. They appear as slow transactions, timeouts, rising response times, or an application struggling under a workload it previously handled. APM provides an essential starting point. It can identify a slow transaction path, highlight an affected service, and show that a database dependency is consuming more time than expected. But identifying the database as part of the problem is not the same as explaining what is happening inside it ...

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Cloud teams are under constant pressure to reduce spend without slowing development or increasing operational risk. They are deploying autoscalers, rightsizing workloads, enforcing resource requests, reviewing utilization dashboards, and building FinOps processes around cloud-native environments. Yet the results often disappoint ...

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Ask most IT leaders about their biggest concern with AI and you'll hear the same answer: hallucinations ... Today, however, the conversation has shifted ... As organizations move beyond chatbots and experiments, they are increasingly deploying AI agents that perform multi-step tasks. These systems retrieve documents, query databases, call APIs, generate reports, write code, and make recommendations. The issue is not whether the model can reason. The issue is whether the organization can see, verify, and govern the decisions being made along the way ...

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For decades, enterprise networks were designed around a simple assumption: work happened inside the office. Applications lived in centralized data centers, employees connected through internal infrastructure, and security focused on protecting the perimeter that surrounded everything ... But the way organizations operate today bears little resemblance to that environment. Cloud platforms host critical applications, employees connect from homes and airports as often as they do from offices, and partners collaborate through shared systems that exist far beyond corporate walls. In short, the corporate network no longer resembles the environment it was designed to protect ...

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