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How to prepare your e-commerce business for Cyber Weekend
Peak season for fraudsters is just around the corner.
Peak season for cybercriminals and fraudsters is just around the corner. Over the last few years, Black Friday (the last Friday in November) and Cyber Monday (the following Monday) have set online traffic and revenue records, crowning the two days as the biggest e-commerce retail days of the year - read more about this here.
And so far, no other days have managed to dethrone Cyber Weekend in the UK and US. In fact, big discounts and price-cuts have driven consumers have to shop even more than previous years, making it a notable day for merchants.
More sales, more promo codes and more traffic all mean more revenue. But it also means more fraud, more complaints, more chargebacks. So how should retailers be prepared?
Setting the record, straight
2016 was a big year for retailers. Cyber Monday stepped out of Friday’s shadows and held its own as retailers saw a sharp increase in digital spending with consumers ditching traditional brick-and-mortar to shop from the comfort of their homes in their pyjamas. Last year, Cyber Weekend did it again, hitting a record high in retail figures, revenue and online traffic.
According to Adobe Digital Insights research from last year:
- Online spend increased 16.9% YoY on Black Friday.
- Cyber Monday was up 16.8% YoY – the largest US online shopping day in history at $6.59B, more than a billion dollar increase over the previous year.
- Mobile had its first $2bn day on Cyber Monday. Conversion rate on smartphones was up 10.1% to a rate of 3.5%.
Additionally, research published on Econsultancy shows that when comparing Black Friday to a normal Friday traffic was up 220%.
“Traffic increased 155% on Cyber Monday when compared to a normal sales day. The same goes for revenue, which was up 240% and 380% on the Friday and Monday respectively.”
What this means for retailers and fraud
If a merchants payments processes are manual with humans and teams approving orders and transactions, then this is a problem. It will be incredibly difficult to scale when the high volumes hit and it will also be difficult to manage your staff.
Companies can always ask their staff to work longer hours which is expensive to do. Alternatively, retailers may choose to outsource some of their human manual review orders to third parties to help out them during the busy period. However everyone in the business will be all hands on to ensure smooth running of systems, but are they working effectively?
Once the craze of the weekend is over, retailers should dive deep into their analytics and gain some insight into how their business revenue was affected.
They should ask themselves:
- How many transactions went through over the weekend
- What was the chargeback rate %?
- Is the chargeback proportionate to the overall number of transactions?
- Are general fraud proportions more, the same, or less?
- Are systems as automated as possibly can be?
Check the chargeback and fraud proportions (ie if a business typically gets 1 chargeback in every 100 orders, however over the weekend this changed to 5 per 100 orders, this a problem.) If proportions are worse, this is a red flag. If it’s relatively similar to usual numbers with no obvious spike, then it’s an amber flag. If you’re getting less chargebacks over the busy weekend, well, may we would we suggest re-calculating, as there may be a problem in the numbers..!
Retailers should automate as much as they can. The better your systems, the more you can use machine learning to scale easily without additional human oversight.
Investing in a good fraud detection product takes the stress away from the team, leaving them to review potentially higher valued transactions, and letting the product take the burden for what would usually be a human process.
Some companies may not be able to have their staff working around the clock, which means they would need to relax some of their fraud checks. This will result in either retailers automatically blocking more customers or take on more fraud.
With automated fraud detection this doesn't have to be an option or choice. You should be able to keep a high acceptance rate and keep your chargebacks low by using a system that scales without human interaction.
High stress and low patience
Whilst these two high-volume trading days are great for consumers to bag a deal, it’s also the perfect opportunity for fraudsters to snag one too. Due to the volume of transactions that take place fraudulent transactions are more likely to sneak through the cracks, making it harder for merchants to spot fake accounts, fraudsters and stolen payment credentials.
With stress high and patience low over Cyber Weekend it doesn’t help that retailers will be shifting their focus on optimising as many transactions as possible and getting as many customer through to their website as possible.
As a consumer, facing friction on a website is a no-go, especially if faced with additional hurdles such as verification methods when trying to make a purchase. Consumers will just go elsewhere.
However, whilst retailers want consumers to shop seamlessly, they also need to be more vigilant to make sure that they have payment protection mechanisms in place so that fraudsters aren’t taking a cut out of their profits over the busy weekend.