E-commerce is on the rise, and digital transformation for businesses must be a top priority in the coronavirus era, according to a new report. Here are the three takeaways.
The coronavirus pandemic has ushered in a new era for the global marketplace, with travel restrictions, layoffs, and shelter-in-place regulations transforming the way that consumers interact in the marketplace. Brick-and-mortar operations have been hit particularly hard, and have been forced to move operations online in order to survive. And businesses that already had an online presence are compelled to not only beef up this presence, but to rethink the kind of services they can provide in the COVID-19 climate.
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But just because business is slowing in the physical world, it doesn't mean there aren't new opportunities for those with a forward-thinking mindset. A new report from Forter has found that, since its April report, there have been "new and steady increases in online consumer purchasing volumes."
The new findings, which were gathered through Forter's global merchant network--which processes upwards of $150 billion each year--look at how e-commerce consumer behavior and fraud are changing during COVID-19.
"Merchants are scrambling to cut costs, reduce the impact of fraud, and scale efficiently," said Michael Reitblat, Forter's CEO. "We have to deliver a consistent customer experience to meet rising consumer online buying behaviour. The aftermath of the pandemic will accelerate digital transformation among merchants as consumer shopping habits adapt."
Here are the three takeaways from the report:
1. Physical operations become virtual
Physical operations have shifted online--food and beverage reported 6.5 times the average growth rate in May. New online accounts compose 15-25% of consumer purchases, up from 5-7% pre-COVID-19.
Additionally, apparel, accessories, and beauty grew by two times the average amount, and home furnishing and garden reported a 20% increase. The report finds that because of these new online accounts, there has also been a jump in service chargebacks.
2. Fraud is on the rise
In uncertain times, nefarious actors can take advantage of consumer fear and of vulnerabilities resulting from new offerings. Many people opening these new accounts were offered promotions, and promotion abuse has resulted, often with consumers creating multiple accounts to take advantage of deals.
In this new report, Forter reports that in the month of May, attempted account takeover (ATO) attacks spiked by 179%.
Additionally, collusion--in which bad actors collaborate to increase each other's popularity, thus increasing sales--jumped by 54% in May.
However, returns abuse, in which consumers exploit return policies, dropped by 22% during this time frame--likely the result of fear of returning to physical stores. This is predicted to increase.
3. Less protective gear--consumers want essentials, plus some luxury items
The report shows a huge spike in the purchases of grocery and deliveries in May: 236%. Of the items purchased, consumers have shifted from wanting masks, hand sanitizer, and toilet paper to bananas, which have increased in grocery carts, proportionately, by 33% in May. (In contrast, the proportion of bananas being purchased actually dropped by 26% in April.) One possibility for the huge spike is that online purchasing has sometimes led to consumers mistakenly purchasing a bunch versus a single banana. Eyewear purchases also spiked 648% in May. And consumers are starting to desire jewelry again, which grew by 17% in transaction volume--possibly also a result of Mother's Day promotions.
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