Web Isn’t So World-Wide When it Comes to E-tail

While there are supposed to be no boundaries dividing the World Wide Web into parts, the reality is that business-to-consumer (B2C) e-commerce usually takes place within a single country’s borders, rather than from one corner of the world to the other.

Invisible barriers such as language, currency and taxation help keep the bulk of e-tail activity from flowing across international borders, analysts and industry insiders say.

There are exceptions, of course. For example, major e-tailers such as Amazon.com (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) said they see significant buying on their U.S.-based sites from overseas customers.

However, both e-tail giants have established significant overseas presence by recognizing the multiple challenges of shipping long distances, translating Web pages and adjusting to fluctuating exchange rates.

“We believe it is more convenient for people to trade in their native language, using their native currency and trading items that may be of local interest,” eBay spokesman Kevin Pursglove told the E-Commerce Times.

Where the Goods Are

Still, Pursglove said buyers and sellers do cross borders to conduct business online.

“We do know that users on the various international sites are trading with one another and that level of activity is increasing,” he said. “Should an eBay user registered on eBay Germany or eBay Italy wish to visit other international sites, they may do so with a click of the mouse.”

According to eBay, its international sites made up approximately 14 percent of the company’s total revenue in the second quarter of 2001.

Consuming U.S. Culture

The numbers are even larger for Amazon. Company executives recently said that nearly one-quarter of its 32 million customers live outside the U.S., and that 19 percent of Amazon’s sales now take place outside the country.

In fact, as the Seattle, Washington e-tailer opened its Japanese site last November, it said that 200,000 Japanese customers were already ordering $34 million a year worth of products from Amazon’s U.S. site.

Reciprocity Lacking

In Europe — where national borders have been blurred by the formalization of the European Union — consumer country-hopping via the Web is relatively common.

However, while consumers from around the world are likely to buy from U.S. sites, the opposite is not as true. U.S. residents are doing much less shopping on overseas sites.

“There might be exceptions, but for the most part, U.S. buyers are shopping on sites here in the States,” Forrester Research analyst James Crawford told the E-Commerce Times. “Buying from overseas poses too many complications for it to be appealing to the average consumer.”

Crossing Borders

Forrester analyst Hellen Omwando noted in a recent report that efforts to set international standards for e-commerce have yet to have a significant impact on the global landscape.

Omwando said a self-regulation movement scheduled to launch in 2002 might help other e-tailers achieve the kind of overseas traffic that Amazon and eBay now enjoy. One key element will be the creation of a central location where complaints can be lodged.

“The opportunity for consumers to lodge complaints will ease their concerns about making purchases from foreign sites,” she wrote.

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How Merchants Can Better Battle Chargebacks and Fraud

Cash flow concerns and fraud are going to be a menace to both retailers and consumers this holiday shopping season. One of the biggest shopping headaches this year will be a much earlier start to the chargeback cycles.

The chargeback period usually comes in January. This shopping season it will likely arrive a lot earlier. Much sooner, in fact, than many of the products delayed in shipping.

Consumers are shopping earlier to improve their chances of getting the desired items. If a merchant substitutes something else, shoppers will want a refund or return, helping to fuel this earlier chargeback period.

That is a big deal for merchants. They either have to go through a time-intensive charge dispute process or end up swallowing the loss themselves. But merchants can take steps now to stay ahead of holiday chargebacks.

The E-Commerce Times discussed these holiday shopping difficulties with Accertify, an American Express company that provides fraud and chargeback solutions to 40 percent of the top 50 merchants around the world.

Supply chain issues are not showing any sign of improving, noted Jeff Wixted, vice president of marketing and client solutions at Accertify. Unfilled orders will cause more canceled orders, disputes, and unhappy customers.

“Due to supply chain issues and parts/product shortages, many customers face constantly changing delivery dates, out-of-stock items, and similar frustrations. Coupled with overwhelmed call centers, many customers find it easier to dispute a charge versus trying to contact the merchant to cancel the order and seek a refund,” Wixted told the E-Commerce Times.

Holiday Survival Tips

Merchants can take several steps to avoid an increase in chargebacks and potential fraud instances, advised Wixted.

Pick your battles. As Covid-19 pushes more purchases online this year, it is even more important to prepare for the holiday chargebacks to come. So remember, not all chargebacks are created equal.

Ask these critical questions when preparing for higher chargeback volumes:

  • Do you have proof that will support your claim that the dispute is invalid?
  • Have you developed and posted clearly defined product descriptions and policies that explain how you conduct business with customers?
  • Is it possible that the chargeback is a valid claim?
  • Would it be extraordinarily difficult for you to prove the dispute is invalid?

Have a plan. When disputing a chargeback, a plan can make the process run more smoothly and efficiently. Perhaps the most arduous of all tasks in dealing with chargebacks is the time merchants spend identifying and tracking down documents to build a proper case. Having a process to choose which chargebacks to dispute will save you time and money.

Try these resolution tips. Specific items need to be addressed in a chargeback situation:

  • Ensure your documentation considers how your business has adapted delivering goods and services during difficult shipping and fulfillment times.
  • Map out your chargeback process and make sure your staff is trained.
  • Ensure all documents are easy to obtain and provided to the necessary parties.
  • Consider partnering with a solution provider to assist with managing the process.
  • Use social media. Sharing photos of gifts received is a common occurrence on social media sites. Use social media to your advantage when fighting back against friendly fraud. Check Facebook, Instagram, Snapchat, and other social media sites to see if there is any evidence in your favor.
  • Update your website to ensure you are adhering to best practice guidelines and policies.
  • Ensure your communication reflects the potentially altered service/goods’ delivery. The clearer you are in your statements, the less likely you are to get a chargeback.
  • Post shipping and return policies visibly, so your customers are clear onexpectations.
  • Employ a click-to-accept procedure during checkout requiring customers to indicate their understanding.
  • Be sure to use the business name on your charge that is clearly recognizable to your customers.

Deep Dive for Retailers

Wixted offered various precautions retailers can implement and tools they need to mitigate the impact of the expected chargeback volume increase.

E-Commerce Times: How are other factors influencing the increase in fraud and customer chargebacks this year?

Jeff Wixted: Economic uncertainty, like times of high unemployment, generally leads to an increase in fraud. We are seeing both first-party and third-party instances.

Jeff Wixted, Accertify

Jeff Wixted, AccertifyVP Marketing and Client Solutions

In first-party fraud, a customer exploits the shipping and fulfillment delays. These abuses may be reconciled as non-malicious or one-time occurrences. People who claimed they never received a good or service but really did and seek a full refund or free replacement are still committing fraud.

Third-party or hostile fraud are cases where professional cybercriminals run a “refund-as-a-service” businesses to help people fraudulently get money by claiming they did not receive their item or service. In return, the service gets a cut of the refund.

Why do charge dispute processes put merchants at a disadvantage?

Wixted: So many factors make chargeback management a costly, complex, and time-consuming effort. Regulations change a couple of times per year. Each network has its own requirements and timelines. So it can be difficult to keep it all straight. Make sure you submit the necessary evidence to give you the best chance to win.

The burden of proof rests with the merchants. So merchants need a solid understanding of what compelling evidence is needed for various chargeback reason codes. Having it will help increase their win rates this holiday season.

Can merchants rely on insurance coverage to reimburse them for chargeback losses?

Wixted: Yes, many fraud prevention providers offer an insured solution to reimburse merchants for the cost of fraudulent chargebacks. These fraud chargebacks still count towards chargeback threshold/ratios with the banks. Merchants’ ratings can go down and they will pay higher fees if they exceed the threshold.

For non-fraud chargebacks, insurance will not apply. A chargeback platform can help retailers consistently win these disputes. We are seeing such an increase in supply chain and even refund abuse-related chargebacks for consumers not receiving the goods and services and disputing the charge instead of working with merchants to get a credit.

How can merchants implement various precautions to be better protected from cyberattacks?

Wixted: So many merchants lack the time or resources to handle chargebacks on their own. Partnering with a solution provider to help with disputes and can increase win rates.

Merchants can take steps to be better protected. For instance, proactively protect and monitor the front-end at the time of account creation or login to keep customers’ accounts safe. Technologies like device intelligence and behavior biometrics can be valuable assets to seamlessly collect, assess risk, and not disrupt the customer experience.

Also, have each aspect of the customer journey protected. This provides insights into who is creating and accessing accounts while also protecting payments and transactions.

Are there different plans/tools for SMBs and larger businesses?

Wixted: Solutions like fraud prevention or chargeback platforms can benefit both SMBs and larger enterprise merchants. The volumes and resources will vary for each, however.

SMBs may need a simpler tool or can use off-the-shelf tools from third-party providers. Those can often fit their needs as the fraud attacks may be less sophisticated. Larger organizations face more complicated fraud attacks and have a higher volume of attacks. They often need to find more configurable tools.

What types of tools should merchants have in place to mitigate the impact of the expected chargeback volume increase?

Wixted: Chargebacks are symptoms of a larger problem. If you do not solve the issue at its onset, you will continue to run into challenges and be stuck in a constant reactive state. Merchants need to take the information from the disputes they receive and feed it back into their risk models and/or fraud prevention platforms to ensure they continually learn and improve.

What should an effective chargeback management solution help vendors do?

Wixted: The solution should help vendors achieve four solutions: avoid, assemble, analyze, and adapt.

Avoid chargebacks with dispute deflection, real-time responses, and chargeback alerts can stop chargebacks from occurring.

Assemble automated responses to significantly reduce the manual effort required.

Analyze data to help merchants determine any operational processes or fulfillment issues to blame for increased chargebacks. Additionally, integrating valuable chargeback data into a fraud prevention application can further help provide critical feedback loops and mitigate fraud at the time of payment.

Adapt network policies to changing regulations and constantly morphing fraud attacks as well as supply chain and fulfillment changes. Also, have a platform that can quickly adapt and manage change.

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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Big Picture Marketing Advice for E-Tailers This Holiday Season

The holiday season is fast approaching, and e-commerce retailers are gearing up with marketing strategies to make the most of this all-important period that, in some cases, can make or break a business.

It’s no secret that much of the money spent in retail e-commerce is transacted during the last few months of the year. That being so, businesses must take their marketing efforts especially seriously during this time.

As if things aren’t laborious enough for retailers and consumers during the holidays, this year the global supply chain disruption has sellers and shoppers on edge, with no solution in sight anytime soon.

To better understand how marketers should navigate this unusual holiday shopping season, the E-Commerce Times spoke with a variety of experts to get their perspectives on what makes for successful holiday e-commerce marketing — and how planning, implementation, and customer engagement is most important in these continually changing times.

Intense Competition

“This holiday season will be the first after companies have had time to adjust to the Covid situation, and where customers have moved much of their buying online,” said Nate Burke, CEO of Diginius.

“Demand is high, and competition is fierce, he told the E-Commerce Times. “Additionally, there are many supply chain disruptions in getting goods in the country and to customers. The e-commerce marketer that is fast and nimble has much to gain, whereas those that do not have integrated systems and ability to move quickly based on stock levels and supply chain issues stand to have a tough season.”

Marketing for this year’s holiday season will be different than any other, and there will be intense competition among e-commerce businesses.

“This holiday season is unlike any before,” said Kunal Chopra, CEO of Kaspien. “Consumers didn’t have the opportunity to celebrate as they normally would last year, which means this year, we can expect they’ll be making up for lost time and making this a holiday season to remember.”

“Not only that,” Chopra continued, “but e-commerce took off during the pandemic and has only continued to sustain its positive growth trajectory. Ultimately, this brings a new challenge: fierce competition.

“The sheer number of e-commerce businesses competing for the same customers is growing, which means online e-commerce businesses have an opportunity to leverage marketing as the secret sauce to stand out this holiday season.”

Highlight Safety

One benefit of e-commerce is that it allows customers the opportunity to shop from the safety of their own homes. As the pandemic drags on, this benefit will continue to be something for marketers to make note of, and capitalize on.

“With the pandemic still around, e-commerce marketers can use a message of ‘shop safely’ to provide an easy way to shop from home without putting themselves or others at risk,” Diaz Nesamoney, CEO and founder of Jivox, told the E-Commerce Times.

“Also, shopping from home avoids driving crowds to the stores and malls. E-commerce is also a great way to shop for friends and family they may not be able to meet even this year, especially the elderly and those with compromised health. For these more vulnerable groups, they can shop online and have the gifts shipped to them.”

Make Connections

One way that businesses can ensure the success of their holiday marketing is to strive to make meaningful connections with their customers and clients.

“My biggest piece of advice is to make sure human connection is at the forefront of your strategy,” said Chopra. “The best way to do this is by leveraging mediums that allow you to engage with your audience meaningfully — like livestreaming, for example. For e-commerce marketers, livestreaming is only getting bigger each holiday season, as consumers value video and visual engagement to drive their purchasing decisions.”

Customizing shopping experiences is one key way to make the kinds of human connections that convert to sales.

“Consumers want to shop when and where it’s most convenient to them,” explained John Federman, CEO of JRNI. “If e-commerce businesses want to remain competitive in today’s retail landscape, it’s important that they communicate the customized services they have to offer to their customers.”

“Whether it’s one-on-one virtual sales advisory appointments that help customers feel more confident about their personal holiday gift purchases or scheduling in-store or curbside pickup orders for items purchased online, this kind of flexibility and personalization can help create a positive shopping experience and, ultimately, build customer loyalty,” he suggested.

Heed Demand

Holiday marketing strategies also need to take into account the pace of the season, which demands constant and ever-evolving engagement.

“Businesses must be prepared to deal with a large influx of customers expecting timely and quality engagement during the holiday season,” Leena Iyar, chief brand officer for Moxtra, explained to the E-Commerce Times.

“In order to accommodate the increased demand during the holiday rush, businesses must be able to deliver convenient, just-in-time engagement to clients,” Iyar advised. “This method of client engagement allows businesses to offer timely responses without draining all their resources by attempting to provide instant, on-demand service.”

Keeping up with demand also means ensuring that the products that are marketed will be available when people order them.

“With basket size up and people preparing more meals at home, the marketing message needs to be more creative and suggestive. People are looking to be reminded of impulse buys, items left off the list or even new ideas that let them explore,” Paul Brenner, chief strategy officer and president of audio out-of-home (Audio OOH) for Vibenomics, told the E-Commerce Times.

“Disruptions from the supply chain have also required retailers to think outside the box on what type of products they’ll promote if any typical holiday bestseller is lower in stock or out of stock due to the disruptions,” he observed. As a lesson learned from last year, make sure you’re only marketing or highlighting products you’ll have plenty of.”

Tech Up

Engaging quickly and keeping up with demand also require that e-commerce businesses invest in their website, app, and ordering technologies.

“Ahead of the holidays, businesses need to re-examine their technology to match consumer preferences,” noted Iyar. “Clients will continue to shift to more mobile and more digital engagement with businesses, as more people prefer the convenience of digital channels over in-person interactions.”

“Businesses now need to accelerate their digital transformation efforts and continually evolve their digital strategies to accommodate these preferences and manage and streamline their operations,” she urged. “Engagement during the holidays will continue to evolve as businesses learn how to maintain a human touch over their digital channels during the time when they interact with an increased volume of clients.”

Getting the utmost out of technologies and digital platforms will ultimately help businesses see success from their holiday marketing efforts.

“Optimize your commerce page and make any necessary brand page updates,” Joe Wu, general manager of Oceanwing, told the E-Commerce Times. “Your brand page can get far more customers during the holiday season than at any other time of the year.”

Seize the Moment, Marketers

The holiday season is one time when people want to hear from marketers, and so it’s vital for e-commerce businesses to make a special effort to reach out to them.

“No matter what the clickthrough or conversion data tells us, there’s the ever-present fear as marketers that customers don’t want to hear from us,” Tasmin Singh, enterprise customer success manager for Iterable, shared with the E-Commerce Times.

“What makes the holiday season unique is that it is one of the few instances during the year that customers embrace our marketing messaging if we get it right,” Singh observed.

“If an e-commerce marketer wants to reach customers during this time, it’s incumbent on them to curate a customer-first, personalized campaign that reaches the right customer, with the right message, at the right time, and on the right channel,” she concluded.

Vivian Wagner has been an ECT News Network reporter since 2008. Her main areas of focus are technology, business, CRM, e-commerce, privacy, security, arts, culture and diversity. She has extensive experience reporting on business and technology for a variety of outlets, including The Atlantic, The Establishment and O, The Oprah Magazine. She holds a PhD in English with a specialty in modern American literature and culture. She received a first-place feature reporting award from the Ohio Society of Professional Journalists, and is the author of Women in Tech: 20 Trailblazers Share Their Journeys, published by ECT News Network in May 2020. Email Vivian.

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