By Ed Whitehead, Signifyd managing director, EMEA
The changes that COVID-19 has caused in rapid succession make it hard to slow down and think about just how to approach a retail landscape and a world that will never be the same.
But it is important for retailers to take a breath, think about where consumers are headed and come up with a strategy to take your enterprise there in time to meet them when they arrive. The best approach is to break the imperatives down into three pieces — preparation for the short term, preparation for the mid-term and preparation for the long-term.
Let’s start with the change we know is happening. In March, when the World Health Organisation declared a global pandemic and governments began ordering non-essential stores closed, the nature of shopping changed.
Consumers turned to e-commerce for essentials and for non-essential items that would make sheltering at home more comfortable and less monotonous. E-commerce sales in Europe peaked at 70% year-over-year at the height of online buying during the pandemic. With non-essential stores reopening and with consumers less inclined to stockpile, online buying has cooled, but e-commerce spending into September remained more than 50% higher than pre-pandemic figures, according to Signifyd Ecommerce Pulse data.
New online shoppers have flocked to e-commerce in the face of COVID-19
The data makes clear that a wave of new online shoppers are contributing to the dramatic growth. The number of new customers buying from merchants on Signifyd’s Commerce Network, for instance, more than doubled in May, compared to pre-pandemic figures. (Signifyd defines a new online shopper as a customer who has not made a purchase from the more than 10,000 merchants on its global network for at least a year.)
What’s more, these new customers soon demonstrated that they were developing an ecommerce habit in significant numbers. About half of them returned for multiple purchases within 30 days.
So, e-commerce sales are exploding. Consumers who eschewed online shopping before are becoming regular online shoppers. All good news. But what should retailers be doing to take advantage of the good news — and to make sure that those new shoppers become loyal customers at their online stores.
Short-term steps to build customer loyalty
It starts with the short-term: deliver, quite literally, on e-ccommerce. Retailers need to be ready to fulfil consumers’ orders in whatever way those consumers wish. That answer for any consumer on any given day is likely to be different from the day before. And so in the time of COVID, retailers will need stores that are clean and configured for social distancing. They’ll need reassuring signage and masks for associates and for customers who show up without them.
Retailers will need to be on top of their home-delivery game, particularly as demand remains high and supply chains remain challenged. Click-and-collect is an option that has grown in importance. Encouraging click-and-collect through promotions or loyalty benefits is a way to ease pressure on those strained delivery channels. And it’s a way to give skittish consumers an alternative to spending significant — or any — time in the store.
Doing click-and-collect well requires a clear vision into inventory and an order management system that ensures orders can be assembled and ready for pickup within hours at a particular store or locker. No small part of the order management effort includes identity verification that is robust enough to confirm that the person picking up an order is the rightful owner of the order.
Mid-term steps toward ensuring retail success
Strong customer authentication is here. For most of Europe, enforcement of the robust form of two-factor authentication begins at the end of December. The UK’s deadline is later in 2021, but if UK retailers want to sell into much of Europe, they’ll need to comply.
Beyond that, SCA requirements present an opportunity for retailers to fortify their fraud protection with state-of-the-art, machine-learning systems that will provide a better customer experience today and position them to accommodate future changes to payments regulations.
Long-term steps for building loyalty among existing and new customers alike
The pandemic and its disruption feels like it will never end. But it will. Retailers will want to be in a position to build on the relationships they’ve built with customers before and during the lockdowns and social distancing.
Some of that will be redoubling efforts they’ve made all along. They’ll want to build flawless online experiences. They’ll want to provide intuitive navigation and enhance the customer experience with engaging content, precise personalisation, invaluable customer support, seamless checkout and instant order confirmation.
The trick will be to offer a friction-free customer experience while still protecting the enterprise. As e-commerce grows, those looking for ways to exploit it are growing in ingenuity and boldness. Return abuse is up 35% over last year. Consumer abuse in general — in the form of false claims that a package never arrived or that a legitimate order was actually a fraudulent order etc. — is responsible for £21 billion in losses. And more than half of all chargebacks can be attributed to consumer abuse.
The danger is that, in the face of increasing fraud and abuse pressure, retailers will begin to treat too many customers as if they were criminals. Needless to say, that’s no way to build a satisfying customer experience or long-time loyalty.
Automated systems can help with many of these long-term initiatives and position a merchant for the future of retail. AI-powered content management systems, personalisation engines and automated inventory control can advance discovery and fulfillment performance. Fraud and automated order management systems that instantly differentiate between fraudulent and legitimate orders and offer a ship-or-don’t ship decision can speed checkout and reduce the chance that a legitimate customer will be insulted by an incorrectly declined order.
No question, the COVID-induced upheaval can make planning for the future seem a little overwhelming at times. But retailers that find the mental space to plot the future step-by-step will find themselves in a strong position today and in the post-pandemic future that we all look forward to.