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Summer Stats Show a Frenzy of Sales and a Flurry of Fraud

By Jack M. Germain
Aug 21, 2020 4:00 AM PT
e-commerce and digital fraud statistics

Consumer spending trends and hackers' attack strategies continue to adjust to pandemic pressures, according to a report from digital payments player ACI Worldwide on the July U.S. Retail Sales Index.

The data, sourced from hundreds of millions of e-commerce transactions during July and the course of the pandemic, revealed a 19 percent increase in global e-commerce transactions in July 2020 compared to 2019, with outdoor equipment sales leading the charge.

Under more normal conditions, shoppers would be typically filling their carts with back-to-school supplies and fall clothing styles. Instead, as long lockdowns ease people out of their homes, they shopped in a frenzy during July for outdoor goods.

The increase in sales activity gave retailers trouble keeping certain items on their shelves. With restaurants and more stores closing again, coupled with COVID surges, consumers are buying anything they can to keep occupied outside, according to analysis by ACI Worldwide.

Digital Fraud Accelerating

Fraud continues to escalate as criminals take advantage of card-not-present payment methods, including buy online pick-up in store (BOPIS), or click-and-collect.

Although fraudulent transactions by volume were slightly lower in 2020 (2.3 percent) compared to 2019 (2.6 percent), the data showed that fraud transactions by value were 4.4 percent higher this summer.

"Fraudsters are targeting higher value items like electronics and luxury brand names, especially within newer channels such as curbside pick-up and in-parking lot pick-up," said Debbie Guerra, executive vice president, ACI Worldwide.

Despite the struggles the pandemic imposes on the economy, consumer activity gives both retailers and e-tailers hope for continued growth as the recovery persists, according to several marketing experts' reactions to the challenges and opportunities highlighted in the report.

High Traffic in E-Commerce Lanes

Overall e-commerce sales continued to increase in the U.S. (13 percent), U.K. (17 percent) and Asia Pacific or APAC (43 percent). This was driven by sub-sectors such as DIY, apparel, alcohol, digital downloads, and gaming.

"We continue to see a huge increase above industry averages in e-commerce sales year-over-year," Guerra continued. "As more brick-and-mortar stores reopen with COVID restrictions, we are seeing card-present transactions slightly increase. However, we expect the e-commerce trend to continue post-COVID as consumers experience the convenience and speed of digital payments."

One of the key takeaways from this report is the positive push the pandemic is providing to global e-commerce, according to Erika Dietrich, vice president of Global Fraud Prevention Risk Services at ACI Worldwide.

"Over the last few months, we've seen e-commerce sales remain strong, even though the categories of goods that are performing the strongest continue to change," she told the E-Commerce Times.

For example, in March a surge in sales of PPE, electronics, and home office supplies occurred, as multiple countries imposed lockdowns. In July, that was replaced by strong growth in sales of outdoor equipment and sporting goods.

"This suggests that although there will be fluctuations across segments and geographies, the pandemic itself continues to play a significant role in increased e-commerce sales," she said.

Tectonic Shift to Online

With the uptick in digital payments, marketers need to be mindful of strategies that will be sales drivers as the summer starts to wind down. But regardless of the season, merchants that offer and promote both free shipping and competitive pricing experience high sales, noted Dietrich.

"The availability of online shopping and digital payments has been a boon to consumers and merchants alike, as it continues to be the safer and newer preferred option amidst the pandemic and likely beyond," she added.

Another insight ACI researchers gleaned from the latest data is the degree that the pandemic solidified the trend from offline to online shopping. The trend was already established. COVID-19 accelerated it even more so.

"We see this in digital banking, too. The shift that many expected to see in the next few years has happened within a few months, and we believe that shift will be a permanent one," said Dietrich.

Key Challenges Remain

Retailers face issues now that involve the need to adapt quickly to an ever-evolving market. Another complication is how retailers can keep the right products on shelf, according to Katie Thomas, lead at Consumer Institute at Kearney Management Consulting.

"For an upcoming holiday such as Halloween, there is a lot of uncertainty around trick or treating, Halloween parties, and the associated need for costumes and candy. Figuring out the inventory and labor complexities that go along with these rapid changes only complicates things further," she told the E-Commerce Times.

Retailers need to push themselves to take a step back and consider what is the next tier of at-home or local activities, she added as a marketing challenge.

For instance, beyond the home office, people are looking to update their kitchen appliances, perhaps finish a basement, or build a game room, all of which will have associated purchases, Thomas explained.

Similarly, domestic travel and road trips continue to tick up. So will products needed for these types of excursions.

Blending of Tasks

Consumer habits, and as a result their spending patterns and merchandise preferences, are dramatically changing, according to Andres Ricaurte, senior vice president and global head of payments at Mphasis. One big shift is that consumers have increasingly become omnichannel browsers due to blurring boundaries between work and at-home life.

"They expect ubiquitous availability and a consistent buying experience, regardless of where and how they choose to interact with a retailer," he told the E-Commerce Times.

Accurately anticipating these customer behaviors and establishing intelligent and dynamic fulfillment platforms is critical to have the right merchandise in the right place and at the right time. Failure to do so results in lost sales and, in many cases, lost customers, Ricaurte explained.

Once a sale is made, reconciling and analyzing purchase and payment information is a complex task for most retailers, particularly those with a combination of online/offline stores and proprietary/marketplace channels. Each has its own set of payment processes.

Apart from effecting retailers' ability to truly understand who is (and who isn't) buying from them, these complexities also create inefficient fraud prevention, disputes, and reconciliation mechanisms that directly influence retailers' bottom lines, he said.

A Time for Mutual Gain

Consumers will benefit through the optionality that will result in this need for retailer flexibility, noted Kearney's Thomas. Those gains will result from improved options and offerings from curbside pick-up and BOPIS offerings to speed up delivery.

"Additionally, consumers are open to brand switching right now, largely due to availability issues from their standard brands. Merchants can gain new consumers through their own ability to be adaptable and have products available," she added.

However, to keep the consumers in the fold permanently, retailers and e-tailers will still need to deliver on quality expectations, Thomas concluded.

Still, change and uncertainty present a unique opportunity for brands to establish fresh new connections -- and strengthen existing ones -- with their customers, suggested Ricaurte.

The pandemic has demonstrated that there are many currencies for loyalty, and marketers that can capitalize on the purchase path to creating meaningful moments of customer value will see increased sales and returning customers.

Instant access to lending for large-ticket items, and the ability to select rewards during checkout, are some examples of the tactics that retailers are actively taking to enrich the purchase journey and increase loyalty, he offered.

Going forward, Ricaurte sees merchants embracing next-gen technology at an exponential pace and accelerating their digital transformation to enable a wide range of new commerce experiences.

"This will range from dynamically preparing the floor for customers coming in that day, to orchestrating end-to-end purchase experiences that seamlessly blend together virtual and mobile browsing, to in-store product testing, touchless and cashierless payments, and hassle-free returns," he predicted.


Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.


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How will the pandemic influence your holiday shopping habits this year?
I will shop online exclusively, for my own safety and to help limit the spread of the coronavirus.
I will do some shopping online, and some in-person because I want to support merchants in my area.
I will shop online definitely, and I will consider local retailers -- but only if they provide curbside service.
I will only shop in-person because the risks associated with e-commerce outweigh my chance of catching COVID-19.
I will not do any holiday shopping this year due to circumstances related to the pandemic.
Three top analysts have picked NICE inContact as the market leader.