March 13, 2018
‘Twas the Fight Before Christmas: Online Fraud Prevention and Retail’s All-Important Holiday Season
Posted November 20, 2017
The holiday shopping season about to kick into high gear in the U.S., with online sales are expected to reach a record $107.4 billion in the U.S.—a 14-percent increase over 2016. But, that’s only if retailers’ online fraud prevention strategies are up to task in the face of what may be shaping up to be the worst period for cyberattacks in retail history.
Santa Goes Mobile
As if mind-blowing discounts alone weren’t enough, the continued adoption of mobile for online transactions will be a major factor this holiday shopping season.
For the first quarter ever, ThreatMetrix saw more transactions from mobile devices (51 percent) than from desktops. And there were four-times the number of mobile transactions in the past quarter compared to Q3 2015. This trend of mobile usage is expected to continue through the holiday shopping season and beyond.
Of course, customers use their phones for more than just purchasing goods online. 60 percent of shoppers do research even when in store to look up product information, do price comparisons and check online reviews. But online sales from mobile devices are now critical to a successful holiday sales season. Black Friday sales from mobile devices alone accounted for $1.2 billion in 2016.
While this all points to a prosperous selling season for retailers, it could also be the start of a cybercrime season unlike anything businesses have ever seen.
According to data from our Q3 2017 Cybercrime Report, businesses will be heavily targeted for cyberattacks this week through Black Friday – with more than 50 million attacks anticipated to be unleashed. Intensified bot activity detected by ThreatMetrix during the past quarter shows cybercriminals are leveraging automated attacks, which will help fuel these increased incidents.
With this as a backdrop, some business will take the easy route – shifting the burden of authentication to customers. It’s clearly an expedient path, but one that doesn’t truly address the issue. Authentication is the responsibility of the business, and encumbering customers with this task leads to a clumsy digital experience that could have long-term negative consequences.
This holiday season, it could turn a jolly ol’ shopper into the Grinch.
The Last Noel?
According to the National Retail Federation, 47 percent of online shoppers globally reported frustration with their online experience during the 2016 holiday shopping season. What’s worse is that the number of unhappy online holiday shoppers rose six percentage points over the previous year and increased year-over-year in every single one of the 12 major markets surveyed. In the U.S., 36 percent of online shoppers experienced problems, up five percentage points from the previous year.
During the busy holiday shopping season when everyone is pressed for time, shoppers have little patience for step-ups at login, prolonged checkouts or any other obstacles that keep them from buying that special gift.
Give customers anything less than an exceptional experience and you run the risk of seeing those customers take their business to more nimble, customer-friendly competitors. That will quickly turn any business from holly jolly to Bah! Humbug!
O Come, All Ye Trusted
What businesses need is an elegant, holistic solution that protects them from fraud and cybercriminals, and doesn’t impact the customer experience.
Digital identity enables businesses to embrace the reality of authentication in a post-breach world, not just shift this burden to customers. Built from dynamic data, digital identity provides businesses with confidence on each and every trust decision along the customer journey.
Trusted users are allowed to freely transact without the need for additional authentication or added friction, while fraudsters are also instantly recognized and stopped before they can wreak havoc on your business.
By stopping cybercriminals at the front door, businesses are free to focus on growing the business and capturing market share. And fraudsters will move on to easier targets.
It’s enough to make the 2017 holiday shopping season the happiest season of all for everyone – except for cybercriminals.
To learn more, listen to our podcast about The Digital Transformation of Holiday Shopping.