Each year, Amazon’s Prime Day event proves to be even more successful than the last in terms of sales volume. And this year was no exception. In fact, according to ACI data, sales from the two-day event was comparable to Black Friday 2020, which is significant considering Amazon is one retailer that’s influencing market trends to this scale.
Prime Day typically results in many other merchants promoting similar sales events, which drives a significant increase in sales. However, merchants cannot just turn on the marketing tap and hope for the best. To make the most of peak season, merchants need to prepare well in advance for the huge surge in sales volumes, but also opportunistic fraudsters.
Managing fraud during peak
When it comes to fraud management, it is essential to understand the risks associated with sales peaks. Fraudsters will take cover among the unusually high volume of shoppers and take advantage of the fact that consumer purchasing patterns are quite different to non-peak days. This year, ACI figures show there was a 27 percent spike in fraud attempts by volume over the two-day period of Prime Day, compared to 2020.
Now, it is plausible that someone buys clothing in the morning and a new TV in the afternoon when discounts and promotions are in full swing. And this behavior is akin to how fraudsters may act when purchasing goods and services illegally; therefore, merchants must be able to differentiate between a fraudster and a good customer – shutting down the fraudulent transaction and allowing the genuine customer’s transaction to take place without friction.
Some consumers, with nothing specific on their wish list, may idly keep an eye on special offers during sale days. These consumers are drawn in by the 30 percent discount on that special something they’ve toyed with buying, perhaps for the last six months. Others prepare for days, or weeks, with a “hit list” of target purchases. Once the metaphorical bell rings, it is an ambush-style manoeuvre to rake in everything on the shopping list.
Either way, we all know the feeling. There is no denying that people the world over love a good bargain. And Amazon knows it well.
So, what do retailers need to do to fully capitalize on this? It is essential to have multidimensional fraud strategies that include incremental machine learning technology, which understands how sales events will shift both genuine and fraudulent spending behaviors. A multi-layered approach to fraud prevention is the best way to both stop fraud and give genuine customers the best shopping experience. By leveraging artificial intelligence and positive profiling consumer data, these retailers can become more efficient through high acceptance and low chargeback rates with zero friction, all while improving the consumer experience.
A robust payments setup for peak trading
Globally, eCommerce volumes are up 20 percent year on year from 2019 to 2020, according to ACI data. The jump is even higher for certain sectors. Gaming saw a 90 percent increase in 2020 and retail enjoyed 48 percent growth. Add to that a spike in sales of 6 percent by volume and 18 percent by value during this year’s Prime Day compared to Prime Day 2020, and you can see why a robust and scalable eCommerce payments setup is essential.
Some sectors saw an even higher jump in sales this week. With consumers keen to get out of their houses and move around, the travel and ticketing sectors saw the highest change of all, with a staggering 504 percent jump in sales. This includes consumers choosing to visit parks, attend concerts, or indeed get a well-deserved change of scenery for a few days.
The way people pay is changing too. Merchants need to offer the payments experience and choice that their new and existing customers are demanding. The payments experience can make or break a merchant’s success.
Mobile commerce, for example, has truly become mainstream. From ACI data, 30 percent of all eCommerce transactions were on a mobile device in 2019, and this year mobile commerce is expected to jump to 72 percent of all eCommerce retail sales. We can expect a sizeable jump in fraud attempts on mobile to go along with this shift. To ensure that merchants make the most of the peak trading days, they need to ensure website responsiveness and an easy, fast and frictionless mobile checkout experience.
The pandemic pushed a lot of people to shop online and find the digital payment method that worked best for them. Buy now, pay later (BNPL) options, like Klarna, have seen explosive growth. Offering the right payment methods for customers is critical.
This all brings into focus how important it is for merchants to retain flexibility with their payments setup, as well as the scalability to be ready for volume surges, and be agile in accommodating shifts in the payments mix. And of course, being ready for changing customer behavior across channels.
While Amazon Prime Day can be exciting for both consumers and merchants alike, ensuring fraudsters have no part in it can help merchants keep it profitable too.
As we draw closer to the 2021 holiday shopping season, merchants should already be preparing for peak, so that they will be ready to take on the jump in sales that we may see this year as we ease out of the pandemic.
Find out more about how ACI Fraud Management helps merchants prepare for peak with a multi-tiered fraud strategy: https://www.aciworldwide.com/solutions/aci-secure-ecommerce