Snippet: As consumers prepare for some of the biggest retail events of the year, this shopping season will deliver some firsts. Because of the ongoing COVID-19 pandemic, physical stores will have to enforce social distancing and limit the number of feet through their doors. Frantic shoppers, wary to venture out in any case, will flock online to get their annual fix.

As consumers prepare for some of the biggest retail events of the year, this shopping season will deliver some firsts. Because of the ongoing COVID-19 pandemic, physical stores will have to enforce social distancing and limit the number of feet through their doors. Frantic shoppers, wary to venture out in any case, will flock online to get their annual fix.

How Black Friday made its mark

We’re all familiar with the history of Black Friday. Originally started in Philadelphia, USA, in 1950, it falls on the first Friday after Thanksgiving to mark the start of the holiday shopping season. Characterized for a long time by shops offering bargain deals to their customers, it was only in the ‘80s that retailers started realizing the full marketing potential.

The craze soon spread online and, in 2005, after one online retailer saw a 77% increase in sales thanks to Black Friday, Cyber Monday was launched on the Monday immediately after Thanksgiving too. There have been several spinoffs since then: the addition of Small Business Saturday and Giving Tuesday, for example, guarantee shoppers an extended weekend of huge discounts – all just in time for Christmas.

The idea has spread beyond America borders, too, becoming popular in other parts of the world like Italy, France, Japan and South Africa where Thanksgiving is not typically commemorated. In a 2019 Ipsos report, global sales were revealed to be nearly seven times higher on Black Friday than on any regular Friday. Pakistan of all places showed a spend of 115 times higher than usual, proving the once-American holiday’s now global reach.

More online shopping, more online fraud

Over the years, advancements in both mobile and e-commerce technologies have made consumers more comfortable and confident, in general, with the notion of online shopping. This year’s developments have pushed the boundaries so far that even digital naysayers have had to change their shopping habits.

So, what will this year’s season hold?

Well, research shows that with social distancing still very much in play even this many months into the pandemic, 30% of Americans will avoid shopping in-store as much as possible in the lead-up to Christmas. In the same breath, 84%of them vow to spend the same or more than before on online retail or e-commerce.

While good news for strictly e-commerce vendors and forcing more traditional retailers to re-evaluate their business models, a recent fraud risk report from NuData, a Mastercard company, came with a warning. Having reviewed data from the first six months of 2020, the company reported a massive but expected increase of 67% in global e-commerce and digital goods traffic compared to 2019. The spike also confirmed the shift in consumer needs and behavior already alluded to.

Of particular concern, however, was the increase in fraud attacks that emulated human behavior. These so-called “sophisticated” attacks accounted for 96% of login attacks on financial institutions during the six months of reporting. The creation of fake accounts for fraud schemes also increased sharply compared to the same time in 2019. High-risk mobile traffic grew by 55% too, indicating an increase in fraud attacks originating from mobile devices.

Six ways to prevent e-commerce fraud

With only a few weeks to go until Black Friday kicks off the holiday shopping season, this year will be a showstopper for sure – but, quite possibly, for all the wrong reasons. We now know that criminals will be fully prepared to take advantage of unsuspecting consumers, pushing e-commerce fraud stats to new heights.

Financial institutions owe it to their customers to take stock ahead of the holidays if they’re to keep the risk of digital banking and payments fraud as low as possible. We’ve put together a holiday checklist to help, free to download.

 

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Managing fraud, the Entersekt way

Cara Visser

MARKETING WRITER AND EDITOR

Cara is a high-functioning content strategy and plain language addict whose self-proclaimed purpose in life is to fill the world with good, clean, meaningful content. She loves the challenge of simplifying and translating complex information, especially if there’s something new to learn along the way.

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Entersekt is an innovator of customer-centric fintech solutions. Financial services providers and other enterprises rely on our patented mobile identity system to provide both security and the best in convenient new digital experiences to their customers, irrespective of the service channel. With us, they can concentrate on their innovation roadmap, while delivering intuitive, low-friction digital experiences to their customers.