As Retail Goes Omnichannel, Here’s How to Stop Fraudsters Doing the Same
Omnichannel retailer offering ‘Buy Online, Pick-up in Store’ option to customers this holiday season must collect and analyze a broad sweep of information to minimize risk
Omnichannel is taking the retail sector by storm. Promising greater profits and loyal customers by helping to create a more seamless shopping experience, it’s already transforming the fortunes of digitally innovative organizations around the world. Yet as retailers start to merge channels, new opportunities arise for fraudsters. With an estimated $1.1 trillion1 up for grabs in the US this coming holiday season, you can be sure they’ll be primed to cash in wherever there are gaps in visibility.
Retailers must respond by choosing data-driven solutions that integrate information from a wide variety of sources to offer comprehensive fraud protection.
The Omnichannel Revolution
Omnichannel retail is not a new concept. In fact, leading-edge companies have been talking about it for over a decade. But it’s finally seeing mass take-up thanks to rising customer expectations, improved technology platforms and board-level buy-in for digital transformation projects. In Connectivity Benchmark Report 20182 conducted by Mulesoft, over three-quarters (77%) of global retailers claimed that improving the customer experience was a key priority for digital transformation, with omnichannel one of the top initiatives.
Today, most shoppers are omnichannel. They move between multiple screens and online and offline channels — researching, reading reviews, and interacting on social media before they buy. And they expect this journey to be seamless. In fact, almost two-thirds (63%) of consumers claim a disconnected experience would force them to consider shopping with a competitor, as per the Mulesoft’s report.
Yet for those who get it right, omnichannel can drive happier customers, improved insight and greater profits. Consumers who shop across channels spend 37% more than their single channel counterparts, according to Accenture.3
Fraud goes Omni
Recently, among the most popular elements of omnichannel is the ability to buy online and pick-up in store (BOPUS/BOPIS) also popularly referred as ‘Click and Collect’. Over half (57%) of online shoppers polled in 20174 claimed to have done so over the previous year, because they can avoid shipping fees (73%), it’s more convenient (32%), and it’s quicker (30%) than waiting for a delivery. Half of US consumers5 said they planned to pick an online order up in store ahead of the 2017 holiday season, so we can expect more of the same in the coming month-and-a-half.
But here’s the problem. Verifying the customer’s shipping address is an extra check which can help foil the fraudsters. After all, no scammer is going to want to order goods on a stolen card if they end up being delivered to the legitimate cardholder’s address. But this check is not possible if a shopper elects to pick up an order in-store. Thus, fraudsters can use stolen card details to buy online and then collect from the store. Especially at busy times such as the holiday period, store staff may be more focused on getting shoppers served as quickly as possible than checking IDs.
Visibility across Channels
So what’s the answer? The only way to be sure of stopping fraud at the point of purchase is via a data-driven solution like Simility’s that collects and analyzes a broad sweep of information including device, location, purchase history and behavior. Simility also partners with leading third-party identity check solutions to validate the credibility of the user provided information such as name, social security number, date of birth that was used to create an online account to place a BOPUS order.
Simility leverages all of this data and applies powerful analytics and dynamic machine learning models to it to empower fraud and risk teams to make the right decisions, even as scam tactics evolve. Activity which is not immediately categorized as fraudulent but still warrants extra attention can be flagged as suspicious and requiring manual review at the point of collection. That makes the whole process more efficient for a retailer’s BOPUS staff, who will only need to check IDs for specific flagged orders.
As we hit the holiday season, it’s not just retailers that will be looking to maximize their takings. Invest in smart, data-driven fraud solutions now to minimize your risk exposure.
Schedule a demo to know how Simility can help you address your fraud problems.
1. Retailers could ring up more than $1.1 trillion in holiday sales, topping last year, CNBC, https://www.cnbc.com/2018/09/18/retailers-could-ring-up-more-than-1point1-trillion-in-holiday-sales.html
2. How retailers use APIs to reinvent shopping, Mulesoft, https://blogs.mulesoft.com/biz/industries/retailers-use-apis-reinvent-shopping/
3. Capturing the potential of omnichannel commerce, Accenture, https://www.accenture.com/t20150523T021059Z__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Digital_2/Accenture-Capturing-Potential-Omni-Channel-Commerce-Video-Transcript.pdf
4. Buy online pickup in store, statistics and trends, Invesp, https://www.invespcro.com/blog/buy-online-pick-up-in-store/
5. 49 percent of consumers plan to use in-store pickup this holiday season, GeoMarketing, https://geomarketing.com/49-percent-of-consumers-plan-to-use-in-store-pickup-this-holiday-season
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