Seamless Transaction Experience May Drive Retail Sales as 80% of Consumers Expect to Conduct Majority of Holiday Shopping Online
New TransUnion survey finds intrusive fraud prevention experience may impact online shopping
Eight in 10 consumers expect to conduct at least half of their holiday shopping online this year. In fact, more than 40% of holiday shoppers will make nearly all of their purchases online. The findings come from a new TransUnion (NYSE: TRU) survey of 2,634 U.S. adults conducted during the last weekend of October 2018.
As consumers choose to shop online, it should be no surprise that e-commerce sales may reach as much as $134 billion this holiday season, according to Deloitte. Despite this massive growth in e-commerce, TransUnion’s survey found that retailers must pay even more attention in ensuring their prospective customers have a painless shopping experience.
The proliferation of fraud is a major driver for potentially challenging online experiences. In fact, a recent National Retail Federation study found that the loss of inventory related to theft, shoplifting, error or fraud had a total impact on the overall U.S. retail economy of $46.8 billion in 2017. To stop fraud losses, many retailers have devised fraud prevention tools that can sometimes prolong online shopping experiences.
Limiting the intrusiveness of such tools is critical. Almost half of survey respondents (45%) said additional identity validation requirements during the checkout process could be detrimental. While most of these consumers (39%) said they were willing to spend some time for security as long as it didn’t affect their shopping experience, about 6% said this practice would cause them to have a negative response to the retailer.
“Retailers need to be sure they provide a seamless experience for their prospective customers while also ensuring they are not being defrauded of expensive merchandise,” said Glen Goldstein, senior vice president of technology, retail and e-commerce markets at TransUnion. “It’s clear customers are willing to give retailers some time to ensure fraudulent activity is not occurring, but a long and obtrusive validation process will more than likely cause many of these businesses to lose potential sales.”
Maintaining relationships with holiday credit card users
Validation of credit card information is often a major factor in preventing fraud. According to the survey, 50% of holiday shoppers expect to use personal credit cards on their purchases and another 5% plan on using retail branded cards.
Keeping consumers motivated to continue shopping is especially important during this 2018 holiday shopping season. The survey found that while almost half of consumers (48%) will spend the same amount as last year, only 23% said they planned on spending more compared to 29% saying they will spend less.
Solving for potential online holiday shopping losses
The survey also found that many consumers find it especially important to shop at retailers who provide strong security on their e-commerce and mobile sites. About six in 10 consumers believe both account and credit card information security are most important to them during holiday shopping. In addition, mobile devices will be used as often as desktop computers.
To this effect, TransUnion this year launched IDVision with iovation, an enhanced suite of identity management, authentication and fraud prevention solutions that allow businesses to quickly and accurately determine good customers from fraudulent ones
“To fight back against fraud, retailers must move beyond rules-based systems to embrace technology that can quickly respond to threats by incorporating information from digital and device layers,” Goldstein said. “Digital layers can analyze behavior on a website from the moment of first interaction, looking for behaviors such as session velocity. Additionally, device layers can analyze attributes of the device itself, such as geolocation and reputation. The end result is that the retailer has properly safeguarded their company while also quickly moving forward with a consumer transaction.”
For more details about the TransUnion retail survey and other fraud insights, please click here.
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
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