With the holiday season comes a frenzy of online shopping activity. For retail businesses, this busy season is a critical period when an essential amount of revenue is at stake. And while this festive time of year means an increase in sales, it can also mean an increase in fraudulent activity.
As we look to the upcoming holiday season, we’ll outline some of the key trends online retailers should be aware of and focus on a few tips that can help you make this upcoming season a success.
It’s no mystery that the past year forced retailers to rethink their online strategies. With consumers flocking to the internet to make purchases big and small, new behaviors emerged that are now here to stay.
In 2021, as we enter the holiday season, there are a few key retail trends that successful retailers will pay attention to.
Both 2020 and 2021 have been excellent years for online retail. Experts predicted that the increase in online sales during the pandemic would continue as more consumers became accustomed to the convenience of shopping online. And they were right — big time.
By the numbers:
The shopping habits formed during lockdowns are here to stay, which offers an incredible opportunity for online retailers during the upcoming holiday season.
Much of online shopping will involve consumers placing orders and picking them up at the store or the curbside.
By the numbers:
The dramatic shift to more online traffic and the desire for more fulfillment options marks a significant change for retailers.
First, retailers have to ditch the mentality that online sales are simply a nice-to-have. Instead, the time has come for retailers to prioritize the omnichannel experience, tapping into this consumer demand.
Secondly, retailers will need to look at how easy their omnichannel experience is to navigate. With retail giants like Amazon setting the bar, consumers come to your online store with high expectations.
One of the greatest benefits of the holiday season is an influx of new shoppers. For online retailers, there is a massive trend of new shoppers visiting online stores.
By the numbers:
While this upward tick of new shoppers is a good thing, it does come with its own set of risks. When holiday order volumes are high, and your store is flooded with new customers but no purchasing data about them, it gives fraudsters the cover they need to go unnoticed.
The trends look promising for online retailers as we head into the 2021 holiday shopping season. But there is a reality that more online activity can increase the risk of fraud. The internet has made it easier than ever before for fraudsters to game the system, and the holiday season is an ideal time for fraudulent activity to rise.
In fact, during the 2020 holiday season, Signifyd data showed a marked increase in fraud pressure, up 450% in November 2020 over pre-COVID numbers. In addition, consumer abuse incidents were up 227% in November over pre-COVID times.
The good news is that with a few key tactics, you can get ahead of fraudulent activity, allowing you to maximize on the busy holiday season. Of course, it all starts with preparation.
Getting ready for the holiday season should start right away. Preparing early can help you set your entire team up for success.
Realistically, you are going to need to improve your risk and fraud management throughout the holiday season. However, be sure to thoughtfully improve your protection and not simply tighten up on fraud rules.
Being too conservative with your rules in an attempt to catch fraudulent activity can lead to legitimate orders being declined.
For example, the following are all incidents that may occur during the holidays and which are often used as red flags to decline a customer:
This gets tricky, though, because during the holiday season, these are also incidents that can naturally occur due to the unique spending habits of the season.
For example, customers might use a credit card they rarely touch, so they can add a little wiggle room to their credit limit in pursuit of a big holiday purchase. Or maybe they use a secondary credit card to hide a gift purchase for a loved one from that loved one. And the mismatched addresses? They might be shipping things to a family member’s address where they plan to celebrate the holidays.
Turning away these customers can harm your business, leaving customers frustrated while simultaneously losing out on substantial holiday revenue.
New customers present an opportunity but also a challenge. If, as a retailer, you’ve never seen a new customer before, you have no order history to use as a behavioral benchmark.
With so many unknown shoppers arriving this holiday season, it will be more challenging to sort legitimate customers from opportunistic fraudsters.
The surge of new shoppers and increased spending during the holiday season also creates a scaling problem for many retailers. If you rely heavily on manual fraud review, it’s not likely that your team will be able to keep up with the additional workload — at least not at a pace that will assure rapid delivery.
This is where modern technology can help. Consider turning to automated order review for your overflow — or even for the bulk of your order screening. Automated systems are scalable, so they can handle big spikes in the holiday season and then ratchet back down when the surge is over.
An innovative breed of fraud solutions, including Signifyd, use big data and machine learning to render ship-or-don’t-ship decisions in milliseconds. They are infinitely scalable and the best of them offer a guarantee on approved orders. If an approved order turns out to be fraudulent, the fraud protection provider will make a merchant financially whole.
The assurance helps optimize revenue year-round by removing fear from the equation and allowing eCommerce leaders to embrace their instinct to ship as many orders as possible.
As you enter the busy holiday season, bolster your fraud protection with a solution that is leading fraud and risk management into the new era of eCommerce. This will free you to focus on the immense amount of opportunity the busy season ahead holds for your online retail store.