November 13, 2018
Online Fraud: 3 Ways to Boost Business Securely During 10th Annual Singles Day
Posted November 7, 2018
Alibaba is celebrating 10 years of Singledom by taking its $25 billion online shopping extravaganza to a larger international stage than ever before.
But how do you top a decade of annual successes that now earn more than Amazon’s Prime Day, and the Black Friday and Cyber Monday’s of every other online merchant—combined? And what lessons can other online and mobile merchants glean in terms of delivering a fast, friendly shopping experience while simultaneously preventing fraud?
Here are 3 of the biggest—and what they portend for retail’s all-important 4th quarter and beyond.
#1 Go Omnichannel—or Go Home
According to CNBC, Alibaba’s not forecasting Singles Day sales after last year’s record. But it’s likely that given his imminent departure, founder Jack Ma will want to go out with a bang.
Sure, mobile is a big part of that effort. Last year, 90% of Singles Day sales came via mobile, up from 82% in 2016. But mobile is just the beginning. As part of current CEO Daniel Zhang’s “New Retail” strategy, the ecommerce giant is predicting the event will be the largest ever “in terms of scale and reach” thanks to the extension of digital transformation to its offline presence.
The idea? Create an increasing number of consumer touchpoints by combining clicks from its core online shopping sites Tmall World, AliExpress Taobao with bricks—by way of physical stores, real-world logistics, food delivery and more.
The problem: Traditional user authentication systems can’t tell the difference between legitimate customers and fraudsters using stolen login credentials on retailer websites, mobile apps, kiosks and elsewhere. Factor in a huge event like Singles Day and things get even tougher, especially when it comes to account creation. For merchants that aren’t hosted on massive platforms—Tmall, JD, etc.—invasive identity verification strategies can drive away potential customers and hinder business growth.
As a result, some merchants may find they need to deploy modern, digital identity-based solutions with the kind of machine learning capabilities needed to analyze device intelligence and dynamic identity elements that can’t be lost or stolen in order to conduct safe, secure transactions with confidence across any and all channels.
#2 Cross More Borders or Get Left Behind
Alibaba, rival JD and others have been steadily expanding Singles Day to other nations, including Taiwan and Hong Kong, where it’s gaining steam. For Alibaba, this is all icing atop the 440 million active users it already has in 435 countries.
As it stands, cross-border ecommerce is the fastest growing sector in retail. In fact, our own data shows that 54% of all ecommerce transactions are already cross-border in a market dominated by Alibaba and others that have prioritized global expansion.
But cross-border transactions are also 69% more likely to be rejected than those made domestically due to suspicions. These transactions are also 15% more likely to be device spoofing and 22% more likely to be identity spoofing.
They might not even be people at all. During the 2017 holiday season, for instance, ThreatMetrix data shows that out of 600 million online and mobile transactions there were 34 million attacks. And there were more than 70 million bot attacks on top of that—including more than 2 million daily bot attacks on major US merchants from Russia.
This year, it’s likely to be far worse. As of mid-year, bot attacks were numbering at 1.6 billion per quarter. Retailers hoping to avoid steep losses from attacks without ceding global markets to more tech-savvy competitors will find that their user identity and verification solutions are only as good as the data they’re built upon.
The challenge here will be sourcing solutions that grant them access to anonymized, globally crowdsourced threat intelligence that can help them expand into new markets by being able to accept more international transactions with confidence—even from regions considered high-risk.
#3 Embrace Seamless CX as the New Brand
Regardless of channel and location, the common thread in all of this is the customer experience.
Today, 87% of consumers think brands need to do more to provide a more seamless experience regardless of device, time and location. For today’s customer, the name of the game is instant gratification across web, mobile, kiosk and time zones.
Indeed, with shopping cart abandonment already generating $4 trillion in lost revenues every year, the ability to deliver a consistent and compelling experience at every touchpoint is key.
For retailers aiming to steal a page from Alibaba, this is especially true when scaling for big events—whether it’s a one-day sales or entire holiday seasons. On-demand throttling of real-time authentication and fraud prevention is essential to avoid business disruptions.
Legitimate customers should be accurately identified without intrusive authentication steps, helping merchants improve brand value by delivering the seamless online experience customers demand. To achieve that without business disruptions or major fraud losses, look for some merchants to beef up infrastructure or fraud department staffing.
But others will likely gravitate toward scalable, SaaS-based solutions that are able accommodate demand spikes and deliver an effortless, elegant transaction experience while protecting against cyberthieves—without expensive new build outs or staffing.
By adopting a Singles Day mentality, merchants can be well-positioned for major holiday bonuses from consumers. In the US for instance, shoppers are expected to spend up to $720.45 billion this season, including up to $119.99 billion through digital channels (a 15.5% increase from 2017).
With any luck, at least a few innovative merchants will emerge to give even Alibaba a run for their money.
To learn how a digital identity-based approach to online and mobile fraud prevention can help your business achieve seamless global presence across all channels, check out our eCommerce page.