Cyber Week and Black Friday shopping figures are in, and show how businesses that embrace technology are thriving in the digital age.

In the run-up to Cyber Week, experts were already predicting a huge holiday season for e-commerce, but with Black Friday and Cyber Monday now behind us and Christmas just over two weeks away, it is safe to say that 2017 is shaping up to be a record-breaking year, especially for mobile.

In the run-up to Cyber Week experts were predicting a huge holiday season for e-commerce
Share on X

The National Retail Federation reported that 81 million U.S. residents shopped online on Cyber Monday, compared with 66 million on Black Friday. According to Bigcommerce, an e-commerce platform which serves thousands of merchants worldwide, during Cyber Five, the five-day shopping period spanning Thanksgiving through Cyber Monday, brands using their services experienced an average sales increase of 21%, which is 4% above the industry average.

2017 is shaping up to be a record-breaking year, especially for mobile
Share on X

Cyber Monday was the biggest sales day for online and for mobile ever in the US
Share on X

This was also the first year in which mobile orders surpassed desktop sales volume during Cyber Five. In 2016, 54% of orders were on desktop devices, and 46% originated from mobile devices. In 2017, mobile orders accounted for 54% of all orders, surpassing desktop on all Cyber Week days. The data also revealed that iPhone users spent 7.1% more during Cyber Five than Android users.

Cyber Monday was in fact the biggest sales day for online and for mobile ever in the US. While online sales amounted to a total of $6.59 billion mobile broke a new record by reaching $2 billion. The Verge reported that mobile also dominated over desktop for the first time for Shopify merchants, which include brands as varied as Tesla Motors and Kylie Cosmetics, according to the company.

This was also the first year in which mobile orders surpassed desktop sales volume during Cyber Five
Share on X

People now have different expectations of how technology should enable shopping experiences
Share on X

These numbers tell an interesting story, because they illustrate how far consumer behaviour has shifted in recent years. People now have different expectations of how technology should enable shopping experiences, and businesses that don’t meet those expectations will inevitably lose sales.

These numbers illustrate how far consumer behaviour has shifted in recent years
Share on X

None of this happened overnight, of course. Brands have long been investing in ways to leverage data to build customer profiles, inform their marketing strategy and outreach, and refine their sales funnels. But the capacity to extract actionable insights from large datasets was traditionally reserved for bigger companies such as Amazon, who had the vast resources required to dedicate to this. Advances in AI and machine learning have, however, democratized access to such insights and tools, and started to level out the playing field.

Advances in AI have democratized access to insights and tools, and started to level out the playing field
Share on X

And this, according to Jimmy Duvall, BigCommerce’s Chief Product Officer, is a key part of the value that platforms such as his can offer to smaller merchants, equipping them with the tools and insights that allow them to offer experiences on par with the likes of Amazon.

“BigCommerce looks at same-store sales to determine the real increase in revenue and orders data year over year for ecommerce brands on the platform with insights into category-specific insights, device trends and purchase activity by region,” he explained. “The significant increase in same-store sales this year further highlights that small and mid-sized retailers continue to thrive, even as Amazon and other industry heavyweights expand into new markets and categories. We fully expect this to be the biggest and most successful online selling season in history.”

This doesn’t mean that smaller merchants are only in competition with larger platforms such as Amazon, Google Shopping or Ebay, however. We live in an age where consumers demand omnichannel experiences, and e-commerce platforms need to provide an open architecture that can be seamlessly connected to other business applications, reducing complexity and operational costs for merchants wherever possible. In practice, that means that merchants can use a single product catalogue to sell their wares across a variety of channels in a frictionless way.

Merchants can use a single product catalogue to sell their wares across a variety of channels in a frictionless way
Share on X

BigCommerce supports services such as PayPal One Touch, which boasts an enviable conversion rate of 87.5%
Share on X

Steve Fusco, vice president and general manager of global distribution at PayPal, says they thrive on this collaborative approach, which means, for example, that BigCommerce supports services such as PayPal One Touch, which boasts an enviable conversion rate of 87.5%.

This year, however, merchants also gained access to data from PayPal Marketing Solutions, which provides insight into customers’ buying behaviours and lets merchants add customized banners to their online stores.

“BigCommerce and PayPal have much in common at the core of our businesses,” said Fusco in a statement, “and through our expanded relationship we are delivering access to fully integrated products and services that help merchants increase sales and average order value.”

Offering customers an array of choices not only in terms of product, but financing, has been one of the key factors in this explosive sales growth. “Since offering PayPal Credit, we’ve seen a significant increase in orders and conversion with lower cart abandonment rates,” said Abe Issa, CEO of Florida-based online retailer DealBeds.com.

Data creates opportunities to improve in-store experiences
Share on X

E-commerce is being driven by insight, and brands both great and small are embracing data to reflect their customer needs and by giving their customers what they want, reap the financial rewards of site experience enhancement, optimised checkout and platform modernisation.

Data creates opportunities to improve in-store experiences and make customer service provision more agile and efficient. As platforms continue to integrate big data into their offering, we will continue to see the consumer journey improve across all sectors. The adoption of the developing mobile and AI technologies will increasingly enable retailers to deliver experiences that are perfectly tailored to each customer and market.

E-commerce is being driven by insight, and brands are embracing data to reflect their customer needs
Share on X

The future of retail is doubtless going to be immersive, experiential, and personalised, and that paints a bright picture for businesses that embrace technology and innovation.

This article was originally published in the Huffington Post

Why E-commerce Needs to Look Beyond the Shopping Cart https://t.co/125ti2BlB2

— Alice Bonasio (@alicebonasio) December 10, 2017

Alice Bonasio is a VR Consultant and Tech Trends’ Editor in Chief. She also regularly writes for Fast Company, Ars Technica, Quartz, Wired and others. Connect with her on LinkedIn and follow @alicebonasio on Twitter.

The post Holiday Shopping is Getting Techy appeared first on Tech Trends.

With the global cost of chargebacks mounting for consumers, banks and merchants alike, we need innovation to fight back

Online fraud is now the most commonly experienced crime in England and Wales, according to a report published by the UK National Audit Office (NAO). Up to 1.9 million cyber-related fraud incidents were estimated to have taken place last year alone, with the cost likely to run into billions of pounds.

Online fraud is the most commonly experienced crime in England and Wales
Share on X

The report also outlined that the NAO faces a significant challenge in influencing partners, such as banks and law enforcement bodies, to take on the responsibility of preventing and reducing fraud. As a “low value but high volume crime”, fraud is often overlooked by governments, law enforcement, and industry alike, says Amyas Morse, Head of the NAO. Acknowledging that the landscape for tackling online fraud is extremely complex, the report calls for an urgent response to address it.

Fraud is often overlooked by governments, law enforcement, and industry
Share on X

The report further cites that online fraud is under-reported; even where data is available there is a lack in the sharing of information between government, industry, and law enforcement agencies. In fact, there is no formal requirement for banks to report fraud or share reports with government, yet we see consistent evidence of fraud recurring all over the world. This is an enduring and global problem, one that takes a heavy toll on merchants and service providers of all sizes, as well as banks, issuers, and ultimately customers.

There was a 17% rise in consumers being caught out buying phantom goods online
Share on X

The growing scale of online fraud also suggests that many people are still not aware of the risks, and that there is much to be done to change behaviour. This is also evidenced in separate figures from Citizens Advice showing a 17% rise in consumers being caught out buying “phantom” goods online. This type of cybercrime occurs when fraudsters advertise items at cut prices on social media sites like Facebook and Instagram—as well as online marketplaces such as Gumtree and eBay—and con buyers into spending on average £1,100 on products ranging from cars to flights and even insurance, which simply do not exist. In only a few months, January to March this year, Citizens Advice logged over 3,600 complaints about such phantom goods.

These scams can have a lasting financial and emotional impact on consumer confidence and their relationship to merchants. While educating consumers is both sensible and necessary, the NAO report stresses that government and industry still have a responsibility to protect citizens and businesses. The report also found that the protection banks provide varies, with some investing more than others in educating customers and improving their anti-fraud technology.

Given that organized attacks of online fraud is likely to increase, this investment is absolutely essential—yet keeping up with the latest techniques employed by fraudsters can put tremendous strain on a company’s logistics. While few would argue that fraud detection and prevention is a priority for businesses, the fact is most businesses lack the necessary resources to build and maintain such solutions. It is the industry’s responsibility, however, to keep up—and ideally get ahead—of these fraudsters in order to protect both themselves and consumers.

Technology adoption can have significant impact on fraud prevention
Share on X

The adoption of such technologies has indeed been shown to have a significant positive impact on fraud prevention. Take, for example, EMV—the technical standard for smart payment cards and terminals that have allowed the rollout of payment solutions, such as Chip and Pin and Contactless. In the UK, its implementation led to a dramatic reduction of 32% in the levels of overall card fraud in the seven years following their introduction in 2004, according to official figures from the UK Card Association.

Such measures have undoubtedly made fraud much more difficult to perpetrate in “card present” payment scenarios, yet the shift to online retail has brought with it an entirely new set of challenges relating to fraud prevention and mitigation. There is no getting away from the fact that individual shopping habits have fundamentally changed over the past decade, and that the shift towards online and mobile shopping is not going to be reversed. PricewaterhouseCoopers’ (PwC) Total Retail 2016 Survey found that the popularity of mobile shopping continues to rise, stating that “46% of our global sample buys products via mobile at least a few times a year, compared to 40% last year”.

Chargebacks happen when customers dispute a transaction and request a refund
Share on X

While this might be good news for consumers in terms of better prices, more choice, and added convenience, it leaves the bulk of “card-not-present” transactions—which are the norm in online shopping and vulnerable to problems such as chargebacks. These chargebacks happen when customers dispute a transaction in their statement and request a refund—often going directly to their card issuer or bank and bypassing the merchant altogether.

Gross card fraud losses for 2015 reached $21.84 Billion
Share on X

According to The Nilson Report, gross card fraud losses for 2015 reached $21.84 Billion, not including the costs incurred by issuers, merchants, and acquirers for their operations, call centres, and chargeback management. By 2020, the report concludes, card fraud worldwide is expected to reach $31.67 billion, and that measures such as improving methods of reducing fraud on card-not-present transactions are critical to keeping those losses in check.

This is a complex issue, since there are many factors which can trigger a chargeback in the first place, and a blunt approach can cause a merchant more harm than good. One of these factors is known as “buyer’s remorse”—where a customer finds a product at a cheaper price elsewhere and uses the system as an alternative returns and refund mechanism. This is one of the forms that so-called “friendly fraud” takes. Another common scenario is where a person requesting the refund is not entirely sure they haven’t made the transaction, but will “try their luck” anyway. Since the cost of investigating such claims is often much higher than the value of the refund itself, banks will mostly opt to issue the refund without dispute, and some customers have learned to take advantage of this to manipulate the system. According to industry research firm Aite Group in their Impact Note of August 2016, 60% to 70% of chargebacks are the result of first-party or friendly fraud.

There are many ways for businesses to make themselves less vulnerable to chargebacks
Share on X

Business can minimise vulnerability to chargebacks in various ways. These include ensuring that they build a good relationship with their customers, by providing accurate product information and keeping the lines of communication open, so customers are more inclined to approach merchants with queries than to go directly to the issuing banks to initiate a dispute. Having a clear and efficient refunds policy also minimises the chance of experiencing so-called buyer’s remorse, where a customer is tempted to use chargebacks as a backup refund mechanism. However, many customers still get confused when seeing an unfamiliar name appear on their statement, as often merchants will be listed under names which differ significantly from their brand or trade name.

“When a customer sees a charge they don’t immediately recognise on their card, they often ask the bank to remove that charge from their statement”, explains Matthew Katz, CEO of Verifi, a provider of end-to-end payment protection and management solutions. “This is done by calling the bank directly to raise a dispute, leaving out the merchant who could potentially provide further information to clarify what the charge relates to. In fact, our research has found that up to 86% of cardholders bypass the merchant and contact their issuing bank directly to dispute or question a charge on their bill”.

While banks generally issue a refund to the customers, the process often has a very negative impact on overall customer experience, causing confusion and lingering trust issues which can lead to future sales being lost. This has an added impact on the merchant’s bottom line, on top of the fees, fines, and operational expenses of handling the chargeback in the first place.

Chargeback costs can quickly snowball
Share on X

These costs quickly snowball, ranging from administrative resources needed to investigate claims and process refunds, to fielding customer queries and potential loss of legitimate sales, present and future. Add this to the operational expense of preparing and shipping merchandise, as well as the value of the goods themselves which often must be written off, and the cost for merchants quickly adds up. Ultimately, this is also very bad news for consumers, as these costs will eventually trickle down the supply chain and translate into higher prices. The true price of these chargebacks is not reflected in the refund amounts alone, significant as these may be. In their September 2015 report, The Impact of Fraud and Chargeback Management on Operations, Javelin Research found that organizations typically spent between 13% and 20% of their operational budget on fraud and chargeback management.

“Globally, chargebacks continue to grow and represent a significant challenge”, agrees Katz, “To address this problem, we need solutions that better align the interests of cardholders, merchants, and issuing banks on a global scale, focusing on continual innovation and refinements that are essential to effectively combat this problem”, he believes.

This is what Cardholder Dispute Resolution Network (CDRN) does, according to Katz. Verifi’s solution—which covers approximately 50% of the US market and boasts a 90% resolution rate—was named for the fifth year in a row as “Best Chargeback Management Program” by CNP Expo. It is now continuing to expand in international markets such as the United Kingdom, Verifi having opened an office in London in 2016, and now announcing a key strategic partnership with payments processor MegaCharge.

Verifi handles over 200,000 individual chargebacks each month
Share on X

One of the problems that CDRN addresses, according to Katz, is the fact that by the time merchants learn of the issue, it’s often too late to stop the chargeback. “Our patented closed-loop technology integrates directly with the top issuing banks. This pauses the chargeback process for up to 72 hours and redirects cardholder disputes from the bank to the merchant in near real-time. The merchant will have more time to assess and resolve the dispute before it ever becomes a chargeback. To date, we are supporting more than 25,000 accounts globally and handling over 200,000 individual chargebacks each month—amounting to an estimated $195 million in chargebacks prevented.

“The problem of chargebacks and friendly fraud are not only impacting businesses’ bottom line, but hindering future growth and jeopardizing customer retention, trust, and satisfaction rates. For merchants to strengthen their risk management and counter friendly fraud, the ideal line of defense would permit merchants to provide insights into the cardholder’s order as shopping cart-level data. This would feature merchant details and even the device used to make the purchase through the financial institution’s platform—all at the time the dispute arises. This deeper level of data can help cardholders better understand their purchases and avoid filing false cases of fraud that result in lost sales, higher labour costs and more”, Katz concludes.

Since the bulk of consumer purchases will be made online, it stands to reason that to tackle online fraud we must leverage data and technology in increasingly sophisticated ways. As the recent reports on the growing scale of this global problem show, gone are the days when the tools to do so could be considered an optional extra. They have, quite simply, become business essentials for every merchant looking to conduct business in the digital age.

This article initially appeared on World Commerce Review

Alice Bonasio is a VR Consultant and Tech Trends’ Editor in Chief. She also regularly writes for Fast Company, Ars Technica, Quartz, Wired and others. Connect with her on LinkedIn and follow @alicebonasio and @techtrends_tech on Twitter.

The post Can Technology Prevent Online Fraud? appeared first on Tech Trends.