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We’ve all heard the 2020 “un” words: unprecedented, unexpected, unpredictable. But as we approach this year’s holiday season, we can still be sure about a few things. Online gift shopping will continue to grow, probably even more than we’ve seen in past peak seasons. Last year, US shoppers said they made  58% of holiday purchases online, and our latest research suggests that  almost 75% more plan to shop online for the holidays than previous years – both for buying and browsing for ideas.

Doing your holiday shopping from home, in your pajamas? You’re not alone.

The full story goes deeper. We expect to see various related trends this year:

• First, the shopping season has started earlier than ever. Supply chain disruptions from the spring have left a lasting impact on perceptions, and we’ve heard that 70% intend to shop early to avoid both crowds and items being out of stock.
• Second, consumers will be even more focused on value. COVID-19 has in many ways reset expectations for what people need or want to buy. We’re used to seeing searches for deals, coupons, and best prices. But this year, there’s been a rapid uptick in those looking for value in quality and price.
• Finally, customers are consolidating their shopping, spending less time browsing in-store, limiting their touching of products. We’ve noticed a striking increase in searches for actions happening before the store visit. The term “available near me” has doubled in popularity since last year, and 67% of shoppers said they plan to confirm online that an item is in stock before going to buy it. This all suggests that by the time they come into your store, more shoppers have already decided what they’re buying.

More than ever before, it’s important that your company’s online shopping experience is up to scratch so it can be easily discovered.

Why Advertise on Google During the Holidays? 

Consider the last time you bought a gift online. Did you start your hunt on Google? If so, you’re not alone. 49% of surveyed shoppers said they use Google to find new items or products, making Google Ads an ideal way to reach shoppers at just the right moment, when they’re actively searching for products and ideas.

And remember that Google is not just a search engine. The tech company has at least eight properties with over a billion users, including YouTube, Gmail and Maps. That means that a single advertising solution lets you connect with a potential customer throughout their journey. You could introduce them to your brand with their initial search, and also get the chance to give them nudges and reminders when they next watch a video or check their mail.

With Ads, not only can you reach people across all of these platforms, but you’ll only be charged when you get results, in the form of measurable success like clicks to your website.

3 Google Ads Strategies to Explore this Holiday Season 

With the end of this strange and challenging year fast approaching, it’s vital to bring your brand online to capture holiday demand. So what’s the best way to take advantage of Google Ads? 

The following campaign types are just a few of the strategies Google Ads offers that make it easier for potential customers to find your products and business details in their exact moments of need or inspiration – or let them complete their purchase with you right on Google. You can run all three (and more) at the same time, or just focus on one, in which case we recommend starting with Shopping ads.

1. Find your next customer with Shopping ads.

75% of shoppers surveyed say that in the last week they’ve used a Google product in the past week to help with their shopping. Google Shopping ads help merchants to reach these shoppers across YouTube, Gmail, Search and the Google Display Network. Shopping ads feature an image of your product, plus a name, price, brand, and more. More descriptive ads give buyers a strong sense of your products and produce better sales leads. 

Your business might also qualify for free listings on Google, which give your products additional exposure at no extra cost. According to internal Google data, both ads and free listings on the Shopping tab have produced a 50+ percent increase in clicks and a 100+ percent increase in impressions on average, with small- to medium-sized merchants seeing the largest share of these increases. 

Before you create Shopping ads, you’ll need to assemble a product feed in Google Merchant Center: that’s a list of products to advertise, with relevant info and images for each one. BigCommerce’s Google Shopping by Sales and Orders lets you sync your feed automatically. Once the feed is approved, free listings will be enabled for eligible users and you can start building your ad campaign.

A useful variation on this is the Smart Shopping campaign. This kind of campaign combines your existing product feed with Google’s machine learning, letting the system test different combinations of the image and text you provide until it finds the most successful variations. To help you get the best value from each ad, Google also automates ad placement and adjustments to reach your best customers and get the best results.

You can create and manage Smart Shopping campaigns directly within BigCommerce using Google Shopping by Sales and Orders. 

2. Get discovered with Search campaigns.

With Google Search campaigns, your ads show up alongside search results when people are looking for the products or services you offer. Running ads can supplement your normal listings on the search results page and boost your visibility.

Search campaigns are targeted to the actions you’d like customers to take, whether that’s clicking a link or making a purchase, and aimed at specific marketing goals. This goal should reflect whatever you’re trying to achieve – leads, sales, web traffic and so on. In addition, each campaign has settings options like location, devices, and language, which let you filter your intended audience. You’ll also need to set your budget and a bid strategy. (More on this below.)

After choosing your settings, you can create ad groups. These are bundles of keywords, related to important search terms, as well as the ads that they will trigger. For example, you might choose keywords like T-shirt, sweatshirt, hoodie as one ad group for your clothing company, while shoes, sneakers, boots could be another. Once you’ve established your keyword groupings, you can build tailored ads that reflect the theme of each ad group.

You can streamline your Search campaign setup and management using Google Ads Keyword Genius on BigCommerce.

3. Introduce your brand during normal daily activities.

Most shoppers are constantly on the lookout for new ideas or discoveries. And they tend to act fast when they find one. In fact, when they encounter a product that meets their needs, 85% of online consumers will take action on it within 24 hours.

But where do these discoveries happen? Often in a customer’s everyday environment, especially on their favorite feeds like YouTube watch lists, the Gmail promotions tab, and Google Discover itself, a news and information service used by millions. Ads in such locations can tap into a customer’s purchase intentions without the need for a deliberate search query, so they work great alongside Search and Shopping campaigns, helping to inspire new audiences to find your products.

Discovery campaigns have similar settings to Search and Shopping ads, including a primary marketing goal and your target audiences. You can let Google help you build strong campaigns by providing creative assets that it transforms into native ads. 

Always use your highest quality images – for example, those that have already performed well on social media – and if you can, provide a good range of pictures, descriptions, and headlines to cover all your bases. Once again, machine learning is your friend: the system will experiment with different combinations to find the ads that get the best outcome.

To learn more about Discovery campaigns, visit the Google Ads Help Center.

5 Tips to Make the Most of Your Ad Campaigns

Regardless of the campaign types you’re using, here are a few ideas to supercharge your ad performance this holiday season.

1. Give your website a health check.

There’s nothing more frustrating than finding the perfect gift online, only to get a broken landing page.  As consumers spend more time online, they have higher expectations from their websites and apps. For retailers, improving your site load time by just 0.1 seconds can boost conversion rates by 8%. And remember, last year, 61% of online holiday purchases in the US were made on a smartphone.

Before increasing traffic to your site, be sure to confirm that your landing pages load quickly, both on desktop and mobile, and that they include relevant product information, tailored to your users’ needs. To find areas for improvement, Grow My Store provides a free, personalized report on your ecommerce website’s performance.

2. Highlight unique offers and promotions.

Don’t forget to engage deal-seekers looking for end-of-year sales. Your ad copy is a good place to do this, and so are ad extensions. Extensions are free components that provide extra functions to your ad, like links or a call button, making your ads larger and more helpful to searchers. Google’s machine learning decides when they appear, and it’s recommended to add at least four extensions as potential options. 

Countdown timers are a particularly effective way to boost your text ads for offers and deals. Another great choice to make your Shopping ads stand out are sale price annotations, highlighting special price cuts and promotions.

3. Leverage Smart Bidding to meet your holiday goals.

There are plenty of businesses who would love to put their ads at the top of Google Search. To determine which ads actually appear and in what order, Google uses a form of very fast auction. This occurs whenever someone makes a search or even visits a site that shows ads.

These instant digital auctions are not simply a matter of bidding the most money. Your ad’s rank is decided by three principal factors:

Your bid: Your bid tells Google the maximum you’re willing to pay for a click on your ad. The amount you actually pay is often less, and you can always change your bid. In most cases, it’s best to use an automated bidding solution, like target CPA bidding. This lets Google bid strategically on your behalf, trying to win as many auctions as possible at or below a price you set.

The quality of your ads: The bidding system also factors in how relevant and useful your ad is to the person who’ll see it. Your ad will be assessed and given a Quality Score, which you can monitor and improve in your Google Ads account.

The expected impact from your ad extensions and other ad formats: There is a variety of optional extra information you can provide to enhance an ad, from phone numbers to specific webpage links. These extensions usually improve your ad’s performance and visibility, making it more interactive and encouraging engagement. In addition, extensions and formats will help your ads do better in auctions. 

All of three of these factors are important at times of high traffic, when many businesses are competing for ad space and conversion rates are much better, making each click more valuable. This applies to your bid especially – even the highest quality ad with the most extensions will do poorly in auctions if it lacks funding – so you should check regularly to make sure your budget is adjusted for any uptick in holiday activity.

Smart Bidding, Google’s automated version, can be particularly beneficial in the holiday season to help with this. It can handle rapid developments in real time, monitoring signals from across Google. Smart Bidding strategies learn from changes in consumer behaviour and can be focused on specific marketing goals. They can also help prevent your ads being outbid, so you don’t miss out on key periods of high traffic. 

4. Optimize your Shopping feed.

If you’re running Shopping campaigns, make sure to give your Shopping feed ample love and attention. This is the heart and soul of your campaign. Your feed setup will impact who sees your ads on Google and how they’re displayed.

Make sure all products available on your website are in your feed, except for any you’re not planning to sell. It’s also critical to populate all relevant attributes in your feed. The more information Google has about your products, the easier it will be to match your ads to the right searchers. 

Pay special attention to the images you provide – they should be as high quality as possible, and should aim to capture the viewer’s attention, even on a smartphone. And don’t neglect your product titles – it may seem straightforward, but try to go with something compelling that resonates with your audience. 

5. Check-in on your performance regularly, but not right away.

Once you get your campaign up and running, your next step is to see how it’s performing. Tracking statistics like clicks and impressions is a great way to start. It’s also important to think about what you’re trying to accomplish with your campaign, so you can focus on the statistics that can help you achieve your goals.

If you’re leveraging automation, like Smart Shopping campaigns or Smart Bidding, a little patience is helpful at the start. We recommend letting your campaigns run at least 14 days before making any major adjustments or assessments of its performance. Why? The system has to collect data, try new combinations and calibrate. 

Once your campaign has been live for two weeks or more, be sure to evaluate your performance regularly, and make adjustments as needed.

Wrapping Up

2020 might be unusual and unpredictable, but it’s not unmanageable. We have a good idea what’s coming this holiday season – likely the most digital-first shopping period we’ve ever seen – and we also know the best ways to approach it with Google Ads. Don’t miss out – make sure you’re fully prepared to make the most of what’s coming.

Walmart is one of the largest retailers in the world. With hundreds of millions of customers each week between their physical Walmart stores and ecommerce marketplace, they continue to ramp up their ecommerce presence and improve their ad tech to compete with Amazon and Google.

And Walmart is hot on Amazon’s heels: Between early 2017 and last year [early 2019], Walmart saw 207% growth in its ecommerce buyer base. In 2018, Walmart became the third-largest ecommerce retailer in the United States, with online sales up by 43% in the third quarter of 2018.

.Right now, the Walmart marketplace presents a fantastic opportunity for ecommerce sellers. More than 110 million people shop on Walmart.com each month, and the marketplace has grown 2020 sales at a higher rate than eBay.

In this guide, we’ll cover everything you need to know to make Walmart marketplace a part of your ecommerce growth strategy through Walmart advertising.

Walmart Advertising Needs to be a Part of Your Businesses’ Growth Strategy

If you sell on Walmart and want to improve your digital marketing strategy and reach more ecommerce shoppers, you need to be advertising through Walmart.

This is especially true if you want to target Amazon shoppers: According to Consumer Intelligent Research, the average US Amazon Prime customer spends more than $1,300 a year, and there are more than 100 million Prime members around the world. However  many Americans also shop at Walmart or Walmart.com.

Plus, advertising on Walmart can help you reach more in-store customers, too: 62% of Walmart customers say their ad experiences on Walmart’s site or app influence their in-store experience.

Here are some additional reasons you need to make Walmart advertising part of your growth strategy. 

1. Measure the effectiveness of your performance ads.

The self-serve advertising portal Walmart rolled out in January 2020 makes it easier for sellers to:

• Target the right consumers
• Measure the impact of their Walmart ads

Lex Josephs, Walmart Media Group’s VP of Sales and Media Partnerships, explained in the official release: 

“With 90% of America shopping at Walmart every year and nearly 160 million visitors to our stores and website every week, Walmart Media Group enables brands to reach more customers at scale and measure advertising effectiveness across the entire shopping journey. Now, brands can tap into Walmart’s shopper footprint to get the right sponsored ad experience, to the right shopper at the right moment.”

Walmart claims that this new omnichannel advertising portal offers a closed-loop advertising strategy that can accurately measure your digital campaign’s effectiveness on its site, mobile apps, and in-store.

2. Supports your organic strategy. 

Clicks and views generated by your Walmart advertising can boost your long-term Walmart SEO efforts. 

Walmart itself has stated that investing in Sponsored Products ads can increase organic ranking. When products get views from your ads, it increases their relevance for the terms that you bid on and that the user searched for. You can also use Sponsored Products ads to give new product listings a jumpstart in gathering data and increasing visibility in the Walmart search engine results pages.

3. Get visibility for new and low performing products. 

Walmart.com brings in up to 100 million unique visitors a month. Those visitors interact with the search results page, product detail pages, and category pages — all primary places for Walmart sponsored ads.

Advertising on Walmart can drive visibility for your products, especially new products or low-performing SKUs. Effective, targeted advertising can help get your lesser-known products in front of a wider audience across the site. 

How Walmart Advertising Actually Works

Walmart’s self-managed service ad platform enables advertisers to purchase ad space within Walmart’s marketplace directly. This new ad platform works similarly to Amazon’s self-serve advertising. 

In the official announcement of the new ad platform, Walmart shared:

“Today, we’re kicking off 2020 with the launch of our Walmart Advertising Partners program to expand advertisers’ direct access to their Sponsored Products campaigns, a bidded auction-based marketplace, giving them more transparency and control. Brands will now be able to increase visibility with Walmart’s diverse, sizable audience of shoppers.”

Walmart has invested in building an in-house advertising platform through Walmart Media Group that lets advertisers buy on-site search and Sponsored Product ads that appear on Walmart’s ecommerce sites and apps.

4 Ways to Advertise with Walmart

All of Walmart’s advertising options operate on a CPC (cost-per-click) model, so you’re only charged when users click on an ad. 

Walmart’s ad offerings are similar to Amazon’s Headline ads. Each ad links to the Walmart product detail page for the product advertised.

In this post, we will discuss the following Walmart Product Ads including:

• Walmart Sponsored Products
• Search Brand Amplifiers
• Buy Box Banners

1. Sponsored product in-grid search results.

Walmart’s Sponsored Product ads can help increase conversions and boost visibility for new products. According to Walmart, Sponsored Products are chosen “based on a combination of relevancy and bid” and must be in stock to be promoted. 

There are two ad types for Sponsored Products:: In-grid search results and Sponsored Product carousels. 

To appear in the in-grid search results, the Sponsored Product must appear organically within the top 128 results and win the buy box. In-grid search results ads look like this:

The ads drive traffic to product detail pages. Brands can set budgets for the ad campaigns; however, the minimum campaign spend for in-grid Sponsored Product ads is $100, with a daily minimum of $50.

2. Sponsored product carousels. 

Sponsored Product carousels show up on the search results, category, and product pages. They look like this:

Items promoted via carousel don’t need to rank within the top 128 organic listings; you just need to pay to have your products listed. Sponsored Product carousels are only available for automatic campaigns.

3. Search brand amplifiers.

Walmart SBA (Search Brand Amplifier) is a branded group of products that show up at the top of a search result listing for specific keywords. This advertising placement is managed through the Walmart internal media team and needs at least 4 Base IDs to be booked.

These ads can help your business drive sales and improve brand awareness, which can be a big help for new sellers or brands launching new product lines. 

4. Buy box banner ads.

This is a coveted spot that is not directly targetable. It’s possible to win the buy box banner only through automatic campaigns depending on relevance and a competitive bid. 

Pro-tip: Walmart does offer additional Display ad options, but keep in mind those ad placements often come with a commitment requirement and higher price tag.

How Walmart Advertising Differs from Amazon

Walmart’s self-serve advertising platform is much newer than Amazon’s and is similar to Amazon’s in its early stages.

But that’s not the only difference. At this time, Walmart offers limited targeting capabilities, centered mostly around keywords and bids. Unlike Amazon, they don’t have audience, page placement type or sales data to use as ad targets in the self-service model.

In addition to targeting and reporting, you should know these three differences between advertising on Amazon and Walmart marketplace advertising.

1. Types of ad auctions.

Walmart uses a first-bid auction, which means that the winning bidder pays their full cost-per-click (CPC) bid. Amazon uses a second-bid auction, where the winning bidder pays the cost of the second-highest bid plus one cent.

This means that brands can wind up paying a lot more bidding on Walmart ads than on Amazon.

2. Bidding strategy. 

Different auction types require different bidding strategies.

On Amazon, you can bid high and know that you may not pay your full bid. (Instead, if you win, you’ll pay the second-highest bid plus one cent). This flexibility means that you can bid on less expensive long-tail keywords to drive sales, then bid higher on more competitive keywords to win share of voice. 

On Walmart, on the other hand, bidding high can end up costing you a fair chunk of your advertising budget. Instead, start your bid low, then scale them up gradually until you find the right mix of reach and return on ad spend (ROAS). Because fewer advertisers are competing for share of voice on Walmart than on Amazon, brands tend to see a higher ROAS on Walmart when they bid strategically (as opposed to starting high). 

3. Auto bids. 

Walmart allows advertisers to set automatic campaign bids at the item level, which lets you group similar products into the same automatic campaign and set individual bids for each product. 

On Amazon, automatic campaign bids are set at the campaign level. To set product-level bids for automatic campaigns on Amazon, you’d need to set up different campaigns for every product. Walmart’s setup allows for much more specific bidding than Amazon.

5 Steps for Getting Started with Walmart Advertising

By now, you can probably tell that advertising on Walmart can be a great way to get your products in front of more shoppers and drive sales both online and off. 

Still not convinced? Take a look at this quote from Elizabeth Marsten, Senior Director of Strategic Marketplace Services at Tinuiti:

“Today, Walmart presents a viable and promising opportunity for brands to expand beyond Amazon. The functionality and performance of Walmart’s self-service advertising platform mirrors much of what we saw with Amazon Sponsored Products when it launched in 2014, where early investors had huge competitive advantages.”

If you’re ready to get started with Walmart advertising, here’s how to do it.

1. Become a Walmart Marketplace seller. 

To sell on Walmart’s website as an approved Walmart Seller, you have to apply via Walmart.com.

The application requires the following info:

• General contact information (name, email, company name, website, etc.)
• Business information
• Product assortment information
• Ecommerce and marketplace experience
• Operations information

Once you submit your application, the Walmart team will review it. If your application is approved, you’ll sign the Retailer Agreement and start onboarding as a seller. 

“There’s no magic formula for being accepted into Walmart’s Seller program, but there are a few key requirements that brands and sellers should fit,” explains Elizabeth. “These include reputation, sales projections, and alignment with Walmart’s values.”

2. Create a product catalog. 

When listing products on Walmart, consider starting with products that already sell well and have positive feedback on Amazon. Our recommendation for Amazon sellers looking to expand to Walmart is to have at least a 95% feedback or seller rating on Amazon and at least 50 product reviews.

Additionally, keep in mind that the following products are prohibited or restricted by Walmart: 

• Alcohol
• Animals
• Artifacts
• Collectibles
• Used products
• Currency
• Drugs and medical devices

You can view a full list of prohibited items here. 

When you create your product catalog, make sure you have the following info ready to add to your product listings in Walmart Seller Central:

• Product details
• Product images
• Pricing
• Reviews
• Inventory
• Promotions

There are three ways to upload your products to Walmart.com:

• Via the Walmart API
• As a bulk upload using Excel spreadsheets
• Through a Walmart channel partner like SellerActive

3. Request to use Walmart advertising.

To advertise on Walmart, you have to submit an additional application. To apply, reach out to Walmart Media Group with the following info: 

• Company name
• Contact information
• Number of SKUs
• Product category
• Primary campaign objective
• Target audience
• Desired advertising plan
• Anticipated monthly budget 

Approval depends on your company’s performance on Walmart Marketplace; however, Walmart Media Group doesn’t list its performance requirements publicly.

4. Attend Walmart online training. 

If the Walmart Media Group approves your application, they will contact you and invite you to a mandatory online training webinar. 

Walmart Media Group hosts weekly webinars that cover the basics of the Walmart ad platform, how to create ads, and other relevant information. There is also a live Q&A session at the end of the webinar.

5. Launch your campaigns. 

Once you’ve fully onboarded, you’re nearly ready to launch your first campaign. 

Before you do, make sure you have a clear plan for your Walmart advertising budget. We recommend budgeting advertising costs for the following strategies:

• Paid advertising to boost organic presence and increase discoverability and visibility
• Digital advertising to improve new product performance
• Target ads to increase the visibility of low-performing SKUs
• Seasonal product ads to take advantage of seasonality spikes

You’ll also need to decide the length of your campaign, which specific products to promote, and how much you’re willing to budget for each specific product. 

Once your campaign launches, don’t forget to monitor campaign performance and adjust your strategy and spend accordingly.

4 Best Practices for Successful Walmart Advertising

Walmart advertising is similar to Amazon advertising in many ways, but it’s essential to create a dedicated plan for each platform. Here are four best practices to get the most out of your Walmart advertising strategy. 

1. Be mindful when using automated campaigns 

Elizabeth Marsten recommends making careful use of Walmart’s automated campaigns: “Automated campaigns tend to perform better over time than manual campaigns, but you need to have at least 10 SKUs in the product group and start by controlling it with minimum bid and ad budgets, working your way up to find that sweet spot.”

When bidding on automated campaigns, try starting your bids at about $0.30-$0.50 and increasing from there. Because they’re eligible for more placements on Walmart.com, automated campaigns can potentially take off quickly (and end up costing much more than you’ve budgeted for). Check on your automated campaigns frequently to keep an eye on their performance and spend.

2. Test keywords for manual campaigns

For manual campaigns, use Walmart’s suggested keywords and test out higher bids for closely related keywords. Try starting your bids around $0.50, and use cascading bids by match type. Cascading bids let you make higher bids on the most closely related keywords, and lower bids on broader keywords.

Also, keep in mind that you’ll probably see lower volume with manual campaigns than with automatic campaigns, and that success for these campaigns is category-dependent.

3. Optimize your product listing and creative 

Great ads will get shoppers on your product page, but your product listing content will make them convert. Optimize product listings and product visuals to create better customer experience on Walmart.com

To make the most of your Walmart product listing content:

• Be concise
• Make the value proposition front-and-center
• Use relevant keywords, but don’t repeat the same keyword more than three times
• Include high-quality images that show your product in use
• If your product category allows it, add video
• In the Walmart Seller Center, add product attributes, tagging, and backend keywords

“Detailed content is the best way to convey the value proposition of your product to the consumer. A Walmart shopper is much more likely to convert on a product online when it has clear and concise information regarding its use.” – Megan MacDonald, Senior Advertising Account Manager at Tinuiti

4. Consider partnering with an ecommerce agency.

If you want to ramp up your Walmart advertising quickly and effectively, consider partnering with an ecommerce agency. Ecommerce agencies offer marketplace expertise and experience that make it easier for brands to get started and see results more quickly. 

An ecommerce agency like Tinuiti will also have a proven methodology of campaign structure, keyword research and optimization, and product promotion in Walmart advertising, which can take a lot of the guesswork out of the equation. Tinuiti also works directly with Walmart as a partner in product development and business development to improve functionality, features, and scalability of its advertising products.

Finally, an agency can help you optimize campaigns to make your ads more effective and offer creative services to make your ads and listings more likely to convert.

Executive Summary 

As Walmart continues to ramp up its ecommerce presence to compete with Amazon, it’s never been a better time to start advertising on Walmart.com.

If you sell on Walmart and want to reach more ecommerce shoppers, you need to be advertising through Walmart’s new self-serve platform. By following the best practices in this guide, you’ll be set up for success to make Walmart advertising an integral part of your ecommerce growth strategy.

It’s time to gear up for the most wonderful time of the year: the holiday shopping season. After an unexpected year of events, many retailers are looking to capitalize on the merriment of the season. This is where planning early and prioritizing online efforts come into play.

The holiday season has always benefitted brands and online shoppers alike. To little surprise, it drives some of the highest sales of the year. 

But, a successful holiday strategy in 2020 requires much more than an online presence. To compete during one of the busiest and most unprecedented seasons yet, brands need to create meaningful connections with consumers, offer personalized online experiences, and provide holiday shoppers with added conveniences and peace of mind.

This year, retailers face new challenges and many unknowns. Here are a few key factors to keep top of mind:

• Customer behaviors have wildly shifted during the pandemic and expectations have increased
• Sustainability and transparency are front-of-mind for Gen Z and Millennial shoppers who continue to rise into more purchasing power.
• The ecommerce industry experienced five years of digital transformation in two months due to the global pandemic. This means immersive technology like voice shopping, AI-influenced browsing and machine learning are no longer seen as nice-to-have’s, rather crucial to facilitating a great customer experience

10 Leading 2020 U.S. Holiday Season Trends

Take a peek and discover the leading 2020 U.S. trends, and see if there are any ideas you should bake into your holiday strategy.

1. Ecommerce will soar.

March 2020, the timestamp when consumers’ lives changed overnight. Ever since the pandemic made its way to the United States, ecommerce sales soared instantaneously. This was in part due to lockdown orders and temporary closures of non-essential businesses, but consumer sentiment toward the virus played a large role as well.

2. Mobile and social commerce will gain popularity.

With more consumers spending time online, social commerce will play a large role in converting holiday shoppers across every stage in the funnel.

Consider creating a mobile app experience for your store or leveraging social commerce tools like Checkout on Instagram or Facebook Shops to offer a more optimal customer experience.

3. Consumers’ new lifestyles will play into products purchased. 

Consumer behavior has shifted through four phases since the coronavirus pandemic:

• The stock-up phase: Consumers were anxious and panicked at the start of the shelter-in-place orders. 
• The settle in phase: The new normal began to seep in. Consumers turned to digital activities – like Xbox – to virtually hangout with loved ones.
• The let’s do something phase: Consumers begin feeling stir crazy at home and summer weather begins, which meant more outdoor activities. 
• The stimulus phase: As consumers received their stimulus checks, they were ready to spend a little extra cash. 

As we head into the holiday season, we know consumer behavior will continue to shape what products are being purchased. Be sure to garner feedback from your customer base to better understand what they’re shopping for this holiday season.

4. Unique, experience-driven commerce will drive more conversions.

You’ve heard it before — but innovative brands are constantly trying to connect with customers both online and offline. Creating an experience around your product helps customers remember your brand and return for more purchases.

“Around the holidays, consumers are looking for a bit more “magic,” when it comes to their experience, so offering an unusual and different experience will engage an audience. Whether it’s a pop-up shop for a digitally native brand or an AR experience through a phone and a physical product, I think we’ll see some cross-over in some holiday campaigns.” — Tessa Wuertz, Director of Marketing, Efelle Creative

So how exactly do you create an experience in 2020?

Consider launching an experience-driven online “pop-up” — an ecommerce store where products are only available for a limited time. Here you can add new products, special offers, or holiday gift guides for last-minute shoppers. Want to take it a step further? Augment an in-person experience with immersive technology.

5. Brands will find more ways to personalize the shopper experience.

Every step in the buyer journey leading up to a transaction can be recorded and marketing efforts can be tailored depending on where a shopper ends up.

For example, using page journey tracking through a CRO tool like Optimizely or CrazyEgg, brands can see exactly where a customer’s cursor is before they abandon a page. From there, they can make recommendations — decrease page length, add a CTA, add an exit-intent popup, etc.

Now, customizations can be done at the shopper-level — as broadly or as personalized as you’d like. Different pages can show different information depending on what products a user has previously browsed, what content they’ve interacted, what they’ve seen in third-party advertisements, and more. You can also tap into Google Analytics to get more information on how your pages are performing.

“Many brands have been collecting details about purchases and people without knowing what to do with them. This year, all that information can help brands customize the experience for their customers and prospects. Way beyond inserting someone’s name in an email, expect to see more focused product/service recommendations, customized emotional appeals, and time/labor-saving offers like drop ship with personalized greetings.” — Mike Wittenstein, Founder + Managing Partner, StoryMiners

The perks of personalization have also found a way into the product experience. Online shoppers are now able to curate more thoughtful gifts via customization, a product feature that is expected to increase in popularity over the years.

“Personalizing products is a growing trend — and is a good way for a product to be special to a customer — which can drive higher engagement and AOV, compared to a race to the bottom on price.” — Keith Karlick, Principal + Head of Strategy, Mercutio

Having a fun interface that allows users to customize a product online is a clever and memorable way to delight customers.

The BonBon Builder from BonBonBon lets customers select the perfect tasty treats for a gift box.

6. Retailers will get smarter about online and offline connectivity.

Just several years ago, it was almost impossible to study a multi-touch customer journey. If a shopper interacted with your ecommerce business on social media before hopping into your brick-and-mortar store, you’d have no way to identify that touchpoint and make marketing decisions based off of it.

Now, online-to-offline tracking tools have changed that — and you bet online retailers will use that within their holiday strategies, especially now that they may be using their brick-and-mortar locations as a fulfillment center or offering curbside delivery services.

“Simply stated, online-to-offline tracking shows you who saw and/or clicked your Facebook or Instagram ad, and then made a purchase in-store. If you have the technical abilities, staffing bandwidth, and discretionary time to execute online conversion tracking in-house, it will work. Whether you do it yourself or hire a marketing partner to help, you can track and optimize your marketing spend better than ever.” — Scott Ginsberg, Head of Content, Metric Digital

In addition, options for customers to buy online, pick-up in store (BOPIS) will be table-stakes for brick-and-mortar retailers. Customers expect an easy shopping experience that saves them time and keeps them safe, so they can purchase their gifts and get back to celebrating.

For the post-holiday rush, brands will need to allow customers to buy online and return in-store (BORIS).

7. Targeted campaigns will be favored over a one-size-fits-all approach.

Once ecommerce emerged as an alternative to brick-and-mortar shopping, brands quickly attempted to reach as many customers as possible with marketing tactics like direct mail, email marketing, holiday promotions, and paid advertising.

Once budgets got leaner and customers got smarter, brands turned to using less general campaigns and more tailored approaches — and technology made that easier.

In the 2020 holiday season, expect brands to double down on tailored and target approaches to their customers through every facet of marketing.

“I hope that brands will highly segment and target their campaigns this year. The temptation is to spray and pray, but due to slim margins driven by holiday discounting, campaign ROIs are compressed, meaning you need to make every marketing dollar count!” — Jason Greenwood, Founder, Greenwood Consulting

8. Brands will need to meet higher customer service expectations.

Savvy shoppers know the ins and outs of online browsing, but sometimes they have questions — especially during the holiday season:

• When will this be shipped out?
• Where is my order?
• Will it get here in time for the holidays?
• Is there a promo code?

They expect answers to these questions quickly, and in the format they prefer: email, phone, text, social media message, or chatbot.

Having multiple forms of customer communication is pivotal for any business that expects a surge of traffic during the holidays.

Customer may have questions about holiday shipping. If you sell and ship internationally, beware of time zone differences — no one wants to wait five hours to get a response from a customer service representative who is across the globe.

On-demand chatbots help to solve this problem, according to Davd Feng, co-founder at Re:amaze.

“Chatbots and automated messaging will be the bread and butter of holiday campaigns this year. Chatbots work around the clock and can help you assist customers in finding the products they’re looking for.”

Since more stores are moving online month over month, it makes sense that digital interactions will subsidize the in-person customer service experience during the holidays.

“As brick-and-mortar stores have been replaced with online shops, customer service has been replaced with chatbots. Customer service will no longer be driven by someone behind a keyboard; questions and support will be handled by automated workflows.” — Chelsey Dewitt, Marketing Strategist, DigitlHaus Agency

9. Smart retail partnerships will help brands stand out.

One of the common dialects of marketing is that it takes more time to acquire a new customer than to get a repeat one — and the same is true for brands who work with each other to create a mutual audience.

“I think we will see brands start to find innovative ways to partner with other brands. Rising acquisition costs are going to force brands to come up with creative ways of reaching new customers through organic channels.” — Ryan Shaw, Director of Growth Marketing, Shogun

If Brand X and Brand Z both have a collection of shoppers who enjoy their products, and their products work well together (wine and chocolate, for example), then it makes sense to combine forces and co-market for the holidays.

“I think relationships and cross-promoting in others’ email lists will be big this year. If you have any relationships where you can leverage others’ customer lists and do cross-promotions, you should definitely take advantage.” — Duran Inci, CEO, Optimum7

This could mean anything from a simple email drop described above, through to a clever collaboration through a pop-up experience.

10. Brands not using video will already be behind the curve.

The rise of digitally fluent shoppers is pushing traditional outreach methods to the back-burner.

Brands are rapidly making the move to YouTube and IGTV advertising — and it’s safe to say that video advertising will become even more popular during the upcoming holiday season.

“I think videos will be a big part of this year’s holiday campaigns, and brands will also use platforms like IGTV and Instagram Live to share promotional videos. Videos are on their way to becoming the most popular content type, and they are the most engaging one as well. Marketers realize this and, therefore, you will see a lot of brands using videos for their holiday campaigns.” — Shane Barker, Founder, https://shanebarker.com/

“Video and AI are going to be used more and more throughout marketing campaigns. The ability to utilize these resources is becoming more readily available now more than ever with the advances in technology and the results are worth the investment.” — Julie Causseaux, eCommerce Strategist, Revenue River

Conclusion

Making sure you have all of your campaigns and logistics planned in advance of the holidays will prepare your brand for greater success.Failing to get all of your ducks in a row may cause you to lose out on real game-changing revenue from holiday ecommerce sales.By planning earlier, bringing in all stakeholders, and taking a look at these new approaches, brands can easily succeed at any holiday revenue goal.

Butterflies. We all know that feeling. The swirly, gooey, fluttery feeling that tumbles in our stomachs when something exciting is about to happen. Maybe it’s a first date, maybe it’s an interview for a dream job, maybe it’s Christmas morning and we, as little kids, ran and jumped our way down to the Christmas tree before everyone was awake.

Pits. We all know that feeling too. A pit in the stomach is heavy, burdensome, lethargic, dragging us down in our core when something we wait anxiously for something to happen. Maybe it’s…a first date, an interview for a dream job, or it’s Christmas morning and we, as little kids, ran and jumped our way down to the Christmas tree to only find no presents under the tree.

We may not have experienced this as little kids, but that’s simply a matter of generation. Our parents likely shopped at malls, mom-and-pop shops, and department stores for us as kids. These days, everyone is turning to the internet for their holiday shopping. It’s a breeze to have holiday delivery for all our goodies sent right to our doorstep. The postal service really knows how to offer us the white glove treatment as we celebrate the holidays and ring in the New Year.

Ecommerce businesses work hard all year to engage with their customers, offer promotions, and land sales, all leading up to the big one — holiday shopping. But the entire experience can be ruined all in the last few moments if the package doesn’t arrive within the expected number of business days. This time of year is not only stressful for consumers if the package doesn’t arrive but for brands as well hoping to keep their customers happy. 

With the added layer of stress and economic impact of COVID-19, the holiday shopping season is going to look far different this year. Black Friday doesn’t exactly lend itself well to social distancing efforts. This year’s holiday shipping demand is projected to be so high that the three major carriers, USPS, FedEx, and UPS, have all announced they’ll no longer have a flat rate and instead will have holiday shipping surcharges. Holiday shipping deadlines will likely have to be earlier in the year.

What is Shipping Insurance?

Shipping doesn’t always go accordingly. Packages are sometimes stolen, lost, or damaged in the process and that can really snatch away our family’s holiday cheer. Tiny Tim wouldn’t be so full of holiday cheer if the post office doesn’t get him his new smartphone on time. Panicked parents have to either watch their kids go giftless or pay for next day air shipping rates to get the package within shorter delivery times. Carriers aren’t perfect and the cost of that can be significant for shoppers and merchants alike. 

To remedy that, shipping insurance is a service provided to both consumers and manufacturers that protects them when a package does not arrive at its destination due to loss, theft, or damage. If the parcel is insured, the insurance holder will be reimbursed the declared value of the items in the package. 

The declared value is important to understand. The declared value is based on the value of the goods in the package. Let’s say you’re shipping or receiving $75 of merchandise and it gets lost, the insurance holder will be reimbursed. If a buyer is reimbursed, it is likely through refund or a no-charge reorder. If a sender is reimbursed, it’s through money back for the sold goods.

Depending on the carrier, some packages are always covered. For domestic shipping carriers, FedEx and UPS, all packages are insured up to $100 of value at no cost. Below is a chart of included insurance values for the three main domestic carriers in the United States:

But there are some packages that cannot be insured. Commonly uninsurable products are currency and other financial instruments, gemstones, hazardous materials, and high-value items that may have a lower coverage limit than others (for example, flat screen televisions are only insured up to $1,000).

Shippers often have a maximum declared value senders can set. UPS, for example, supports up to $50,000 in declared value with a UPS account number. For packages eligible for Enhanced Maximum, packages can have a declared value up to $70,000 per package.  

Providing insurance to your customers in the holiday season is absolutely critical for both your customer retention and your bottom line.

Differences Between Buyer and Sender Shipping Insurance

There are two categories of shipping insurance, buyer and seller. The basic difference is: buyer shipping insurance is funded by the consumer and seller shipping insurance is sender-funded. There are different processes for each.

Buyer Shipping Insurance: Buyer insurance is consumer-funded, meaning at the point of checkout, the buyer has the option of adding shipping insurance to their overall cart and charged to their credit cards. The cost is typically around 1.5% of the cart value to protect your purchase from lost, damaged, or stolen parcels.

There are two options for merchants to offer buyer shipping insurance: opt-in and opt-out. The difference between them is the default setting. For opt-in insurance, consumers check the box if they would like to insure their package for an additional cost, as the default is no insurance. For opt-out insurance, buyers will check the box to decline insurance on their package, the default is to add insurance.

An example of opt-in buyer shipping insurance can be seen from Group 6 Boutique’s shipping policy page. Orders valued at $50 or less are covered with Priority Mail from USPS, but above that, consumers have the option to protect their package with shipping insurance.

One example of opt-out buyer shipping insurance is from Solo Stove. Upon checking out with Solo Stove, shipping insurance is automatically included on the order and consumers have the option to opt out of the additional charge.

One more example of an opt-in shipping insurance option comes from The Kitchn. They also offer a choice in adding shipping insurance to an order, as you can see below.

Seller Shipping Insurance: Seller shipping insurance is sender-funded, meaning insurance is included on all packages sent to the buyer. Sender shipping insurance is growing increasingly common, as it’s now often expected that the seller is responsible for the package until it makes its way to the buyer’s door. (And even more, into the buyer’s hands and not stolen off their porch.)

Some sellers will try to shift the responsibility to their package fulfillment partner. However, this can often be a frustrating experience for consumers who engage directly with the brand. Part of the difficulty is there is often a wait period required from the brand to the consumer, ensuring the package is actually gone and not just late. As you can imagine, this doesn’t go over well for consumers.

For sellers to actually offer true shipping insurance, it must be backed by an insurance provider such as Lloyds, Shipsurance, InsureShip, and others. If a shipping insurance is not backed by a provider, then the brand can either upcharge a consumer or accept responsibility with the full-cost burden to the seller.

Why You Need Shipping Insurance for Your Brand

If brands can hand the cost of insurance off to the customer, that seems like a great idea, right? It’s actually not always in the best favor for the brand or consumer to add those upcharges. In an increasingly digital world, especially during the coronavirus, it likely makes more sense for sellers to absorb the cost of insurance instead. While it may seem like a high cost, the positive impacts will be far greater. Here are four reasons why it’s in brands’ best interest to pick up the insurance costs:

1. Mitigate risks of costly theft, loss, or damage.

The first and most apparent benefit of shipping insurance for businesses is risk mitigation. If a product is uninsured and gets lost, stolen, or damaged, typically the seller is on the hook to cover the costs. They’ll have to fully absorb the mailing and product costs to ship another product out to the customer. With insurance, the value of the package is reimbursed in these cases. Sellers can protect their bottom line while keeping the customer happy.

2. Protect your brand image at a lower cost.

A negative post-purchase experience such as an unresolved stolen, damaged, or lost package will likely lend itself to angry customers, poor word of mouth, social media backlash, and a customer who will not return. In order to keep your customers happy, investing in their experience can ensure (pun intended) your brand’s reputation. Sellers can think of it this way: Choose between covering the full price of a product or the cost of insurance to keep customers happy and your brand reputation protected. A great example of a brand protecting their brand image is The Loco Mama, they focus on fun kids toys so they have to keep a friendly, relatable, and approachable image. By offering shipping insurance, they keep that friendliness intact through strong customer service and problem resolution if things do go awry.

3. Increase your revenue.

A positive experience will bring your customers back and increase their brand loyalty. By providing great customer experience through every customer touchpoint, including product delivery, you’ll keep customers coming back. The relative low cost of shipping insurance will protect the customer experience after purchase, while likely creating increased revenue in the future through higher customer lifetime value, as well as positive word-of-mouth marketing.

4. Ease of use and peace of mind.

Many insurance carriers now offer simplified claim filing processes — some even let you file one-click claims. This ease of use leads to even more positive experiences as customers no longer have to fill out page-long insurance claims or deal with lengthy approval processes. All of this offers consumers and brands peace of mind — consumers’ packages will arrive and brands’ bottom line is protected.

Shipping Insurance Costs

It’s important to note the cost of shipping insurance. Each carrier offers different options and prices to insure your packages on top of shipping costs. See the table below for a breakdown of carrier options:

What Are the Risks if I Don’t Use Shipping Insurance?

Without shipping insurance, there is considerable risk to your order fulfillment process. But not all risk is created equally. These two considerations will guide sellers in their decision making for whether or not they should purchase shipping insurance. Considering these factors, brands can be even more cost effective in determining their risk level and whether or not they should mitigate.

1. Item types.

The risk of the failed delivery service is dependent on the type of products. Some categories are more likely to be stolen than others. Designer brands, items that are more likely to be resold or pawned, and small and lightweight packages are some examples of the types of items that are most likely to be stolen. Porch pirates look for packaging or return labels with brand names, so a best practice would be avoiding an exterior box that showcases a flashy brand name or shipping labels that indicate what’s inside.

2. Destination.

The risk of the failed delivery is also dependent on where the products are being delivered. Some areas are simply riskier to send to. As you may guess, highly populated urban areas face the most package theft, but suburban and rural areas aren’t out of the woods either. Porch pirates will often follow delivery trucks and steal the package moments after it’s dropped at the door, unseen by anyone. Adding tracking or signature requirements can help minimize this risk, but even then many carriers impose coverage limits. When shipping internationally, best practice is always to insure the order, as customs adds another risk factor.

3. Timing.

The risk of a failed home delivery also depends on the time of year the order is placed. Unfortunately, the most wonderful time of the year is also the season when a high percentage of packages get stolen. An influx of online shopping translates into an influx of package theft. Holiday shopping season is a much riskier time for package theft than other times of year.

A Few More Considerations About Shipping Insurance

The final question after merchants have considered all of the above — is it worth it? While benefits are substantial, it may not make financial sense to insure your products. If your brand sells inexpensive products, it may not make sense to insure them. If your brand sells high-end, expensive products, it’s likely there would be a return on investment.

Know your numbers. The answer is found by comparing the average cost to replace a lost, damaged, or stolen item against the average cost to insure it. To find the average cost of replacing items, brands must utilize internal data — the percentage of lost, stolen, or damaged shipments multiplied by the average order value. If 5% of orders are in need of replacement and average order value is $100, the average cost of replacement is $5. If that brand is partnered with USPS (insurance cost for order values of $100 is $2.05) then it makes financial sense to insure items at that price.

If the average insurance cost per item is less than the average replacement cost, then getting shipping insurance makes sense.

Conclusion

The holidays are almost upon us (have you seen any Christmas decor up already in stores?) and brands must prepare quickly to be ready for the holiday shopping season, especially a season that will lean into the digital buying experience like never before. To be ready for Black Friday and Cyber Monday, brands must create positive experiences across the entire customer journey to win customer loyalty and outperform their competition this holiday season.

One of the best ways to create positive customer experiences during the post-purchase part of the customer journey is to provide easy, generous policies in the case of loss, theft, or damage. Such an experience can be costly to brands, so investing in shipping insurance can be a great protection to take responsibility for their products until they reach the customers’ hands.

So the option is yours — offer the butterflies or the pit in your customers’ stomachs. Once a product is purchased, the brand is winning but the experience isn’t over yet. Don’t offer your customers a pit in their stomach, wary of whether or not they will receive their package. Instead give them the butterflies as they wait for their exciting product to arrive and give it to their smiling child’s face.

The news for online merchants is good and bad.

The good news is that ecommerce sales are expected to grow to more than $6.5 trillion.

The bad news? This growth in online sales will be matched by a growth in ecommerce fraud. 

Online retailers currently deal with around 206,000 attacks on their stores each month. As the popularity of online shopping grows, so does the opportunity for cybercriminals and unscrupulous consumers to scam online businesses.

If you own or operate an online store, you must protect yourself against fraudsters who steal from you, wreck your online reputation, alienate your customers, damage your brand, and hurt your profits.

This comprehensive guide tells you everything you need to know about ecommerce fraud protection—what it is, how it works, and what you must do today to protect your online store from the growing threat of online fraud.

Let’s get started.

What is Ecommerce Fraud?

Before you can protect yourself against ecommerce fraud, you need to understand what it is. So, let’s define our terms. 

When we talk about ecommerce, of course, we’re talking about commercial transactions conducted electronically over the Internet, typically through an online store. These transactions are usually made from desktop computers, laptops, tablets, and phones. When we talk about fraud, we’re talking about criminal deception intended to result in financial or personal gain.

Ecommerce fraud, then, is criminal deception conducted during a commercial transaction over the Internet with the goal of financial or personal gain of the fraudster while negatively affecting the bottom line of the merchant. Ecommerce fraud is also called payment fraud.

Two things to remember about ecommerce fraud are that the target is an online merchant and the deception is intended to remain undiscovered. 

Why Does Ecommerce Fraud Take Place? 

Online payment fraud takes place for several reasons, some of them historical, some of them geographical and some of them legal.

1. Ease. 

Before the Internet, fraudsters generally had to steal physical credit cards and make purchases with them. Breaking into homes and cars and robbing people on the street with the aim of obtaining credit cards was a risky business in itself. Occasionally, fraudsters were lucky enough to obtain credit card slips that a store had carelessly discarded and would use those card numbers to fraudulently order merchandise over the phone.

Today, fraudsters have it much easier. They simply visit a website on the dark web and buy as many stolen credit cards as they need. During the first half of 2019, there were at least 23 million stolen credit cards for sale on the dark web.

2. Anonymity. 

Payment fraud is also popular because it is conducted unseen. The fraudsters don’t have to walk into a store, say a word to anyone, or risk getting captured on store cameras. All they need is a computer and an Internet connection. They can operate from any location, at any time of day, unseen.

Online fraudsters typically create fake email accounts and rent post office boxes using aliases that reveal no personally identifiable information about themselves.

3. Evasion.

Ecommerce fraudsters know that police departments do not make ecommerce fraud a priority. For one thing, the amounts of money involved in each fraudulent transaction are typically small relative to other types of crimes. Plus, online fraud is increasingly conducted across international borders, making it hard for the police to locate and prosecute online criminals in other countries.

Six Types of Ecommerce Fraud

When you hear the term “ecommerce fraud,” you likely think of stolen credit cards being used by criminals to buy products from online stores. But credit card fraud is just one of the most common types of fraud. Here are the top six.

1. Credit card fraud.

Credit card fraud is the umbrella term for fraud that is committed using a credit card or debit card. In the context of ecommerce fraud, credit card fraud is also known as card-not-present fraud and payment fraud. In credit card fraud conducted online, the fraudster uses stolen credit card information to purchase products or services from a web merchant.

In a typical scenario, a criminal visits a site on the dark web that sells stolen credit cards. The criminal buys the card data and visits an online store, using that stolen card number to buy a product or service. This initial transaction defrauds the cardholder whose card was stolen. But eventually it defrauds the store owner, who must refund the purchase (and sometimes pay a chargeback fee to the bank that issued the card). Merchants can also become victims to card testing scams, where multiple credit cards are attempted to test which are still active and will allow for purchases. These types of purchases are usually small, low-risk orders, but can add up to a big hit on a merchant’s bottom line.

2. Affiliate fraud. 

Affiliate fraud is illegal activity intended to generate affiliate commissions. In affiliate marketing, online merchants pay affiliates a commission for sales that affiliates refer. The merchants give affiliates a unique, trackable web link that points shoppers to the merchant’s store pages. When a shopper clicks on one of these links and makes a purchase, the merchant rewards the affiliate for the referral by giving the affiliate a commission (typically a percentage of the sale price).

In affiliate fraud, criminals game the system and defraud the online merchant using fake activity to either generate commissions or to increase the amount of the commissions.

A common form of affiliate fraud is “typosquatting,”in which a criminal registers domain names that match commonly mistyped versions of an online store’s legitimate URL. The fraudster then redirects that domain name to the merchant’s website—but with an affiliate link.

3. Chargeback fraud. 

In the world of credit card transactions, a chargeback is a demand that a credit card provider makes to a retailer to refund a fraudulent or disputed transaction. 

In the online commerce world, chargeback fraud occurs when an online shopper makes a purchase with their credit card, receives the purchased goods or services, but then requests a refund from the credit card company, who pushes that through the issuing bank (the bank that issued their credit card, also known as the card issuer). Commonly referred to as “friendly fraud,” this type of fraud results in the payment processor demanding that the retailer refund the purchase amount to the issuing bank. When a bank demands a chargeback, the online merchant is responsible for refunding the purchase.

In a typical scenario of chargeback fraud, a shopper makes a purchase from an online store. After receiving delivery of the goods or services, the criminal waits weeks or months, then contacts their bank and disputes the transaction, claiming it to be unauthorized or fraudulent. The fraudster hopes that the merchant lacks the time and resources to dispute the claim, or simply gives them the benefit of the doubt.

4. Phishing/account takeover. 

Most ecommerce stores provide customers with accounts that store personal information, financial data, and purchase history. Cybercriminals hack into these accounts through phishing schemes. In one of the most common tactics, fraudsters send emails to trick customers into revealing personal data like usernames and passwords. They then log into the customers’ accounts, change the passwords, and make unauthorized purchases. Social media logins are a common way that shoppers can create accounts easily on ecommerce sites, but if that information is hacked, it can be devastating. Criminals are also using bots to steal confidential information, resulting in customers being plagued by the fallout of identity theft.

5. Interception fraud.

In interception fraud, fraudsters use stolen credit cards to make online purchases, ship the goods to the address that’s on file for the credit card at checkout, but then intercept the package before it is delivered. For example, a criminal will visit an online merchant such as Amazon and use a stolen name, address, and credit card to purchase an item. After the transaction is completed, the criminal calls customer service before the item has shipped and changes the delivery address to the criminal’s desired pickup location.

6. Triangulation fraud. 

Triangulation fraud uses three steps to defraud online merchants. In the first step, criminals create a fake online storefront, typically one that offers popular brand-name goods at bargain-basement prices. The only goal of the site is to steal names, addresses and credit card numbers from unsuspecting shoppers.

In the second step, the fraudsters use the stolen customer credentials and credit card numbers to visit a legitimate online store, buy exactly what the victim purchased from the fake store, and ship it to the customer.

The third step is the payoff for the fraudsters. They use the stolen customer data to make additional online purchases that they ship to themselves. This type of fraud typically remains undiscovered for a longer time than other types of online fraud because the original purchase (from the fake site) raises no suspicions on the part of the victim.

How to Identify Ecommerce Fraud Online

As an online merchant, you can spot ecommerce fraud in a number of ways. Just remember that the success of ecommerce fraud depends on the skill and ingenuity of the fraudsters. As merchants increase their defenses against online criminal activity, online crooks also up their game and devise cunning ways to defraud their targets. Here are the most common red flags to look for:

• Inconsistent order data: The zip code and city entered don’t match. Or the IP address of the shopper and their email address don’t match.
• Larger than average order: The order is far larger than your customer typically spends. Other red flags include multiple units of the same SKU in one order, and expedited shipping (the crook wants to receive the order before getting caught).
• Unusual location: Your customer always purchases from an IP address in North America but suddenly makes a purchase from an IP address in an unusual location (Nigeria, for example).
• Multiple shipping addresses: The buyer makes multiple purchases under one billing address but ships the products to multiple addresses.
• Many transactions in a short timeframe: The fraudster makes multiple purchases back to back—and it’s not the holiday season.
• Multiple orders from many credit cards: Someone makes multiple purchases using multiple credit cards (either in one day or over a longer period.
• Multiple declined transactions in a row: The purchaser makes not just one or two attempts (honest shoppers make mistakes, after all), but four, five, six, seven, eight or more attempts without getting the card number, expiry date, and card security code correct.
• Strings of orders from a new country: You’ve never received a single order from the Kingdom of Bhutan, and then you suddenly receive 11 orders from that country in the space of a week.

11 Steps for Preventing Fraud on Your Ecommerce Store

The key to protecting your online store from fraudulent credit card transactions, affiliate fraud and other types of ecommerce fraud isn’t just recognizing these activities when you see them—it’s taking preventative measures that will reduce your fraud risk in the first place.

You have several tools at your disposal for fraud detection and prevention: some technical, some non-technical, some based on software and some based on good-old-fashioned know-how. Here are the steps you can take today to implement ecommerce fraud prevention strategies for your online store.

1. Conduct regular site security audits. 

Want to discover flaws in your security before criminals and fraudsters do? Conduct security audits—often. Ask yourself these questions:

• Are our shopping-cart software and plugins up-to-date?
• Is our SSL certificate current and working?
• Is our store PCI-DSS compliant (Payment Card Industry Data Security Standard)?
• Are we backing up our online store often enough?
• Are we using strong passwords for admin accounts, hosting dashboards, CMS, database, and FTP access?
• Are we scanning our website regularly for malware?
• Are we encrypting communication between our store and our customers and suppliers?
• Have we removed inactive plugins?

2. Make sure your store is PCI compliant. 

If you operate an online store that accepts credit card payments, you must be PCI compliant. PCI stands for Payment Card Industry. PCI standards for compliance are developed and managed by the PCI Security Standards Council to ensure the security of credit card transactions in the payments industry. PCI compliance means your online store and your businesses processes meet these PCI standards. If you operate a SaaS-based ecommerce store, your platform will typically provide this compliance.

3. Monitor your site regularly for suspicious activity.

Bricks-and-mortar stores hire fraud prevention officers to catch shoplifters. You can protect your online store against fraudulent transactions by monitoring your store for suspicious activity. Monitor your accounts and transactions for red flags, such as inconsistent billing and shipping information, as well as the physical location of your customers. Use tools that track customer IP addresses and alert you to any addresses from countries known as a base for fraudsters.

4. Use an Address Verification Service (AVS).

Credit card processors and issuing banks will usually offer an Address Verification Service to detect suspicious credit card transactions in real-time and prevent credit card fraud. The Address Verification Service checks the billing address submitted by the card user (the customer) with the cardholder’s billing address that’s on file with the issuing bank. This check takes place as part of the merchant’s request to the payment processor for authorization of the credit card transaction. When addresses don’t match, the system either declines the transaction or flags it for investigation.

5. Require Card Verification Value (CVV) numbers for all purchases.

The three-digit security code on the back of VISA®, MasterCard® and Discover® credit and debit cards and the four-digit security code on the back of American Express® credit and debit cards is called the Card Verification Value (CVV) or Card Security Code (CSC). By requiring all purchasers to supply this code for every transaction, you ensure that customers have the physical credit card in their possession. This helps to keep you safe and reduces fraud.

6. Use Hypertext Transfer Protocol Secure (HTTPS). 

HTTPS is the secure version of HTTP, which is the primary protocol used to send data between a customer’s web browser (like google) and your online store.  HTTPS encrypts this data to protect sensitive information, such as customer names, addresses and credit card numbers. Using HTTPS prevents your online store from having its transactions broadcast in a way that’s easily viewed by hackers, cybercriminals, and fraudsters. You use HTTPS by buying an SSL certificate. 

7. Avoid collecting too much sensitive customer data.

One way to protect your store in the event of a data breach or hack is to collect and store as little customer data as possible. Hackers can’t steal what you don’t have. So only collect the data you need to complete a transaction and ship the product. Avoid collecting Social Security numbers, birth dates and other unnecessary sensitive customer data.

8. Set limits on purchases. 

Based on your order and revenue trends, set limits for the number of purchases and total dollar value you’ll accept from one account in a single day. This reduces your exposure to a minimum should fraud occur.

9. Try an anti-fraud solution.

When it comes to detecting and preventing online fraud, there are a variety of software solutions to suit your needs and your budget. Additionally, the tools you select may vary widely when it comes to how much work is involved in installation and ongoing management. Some may prefer a more hands-on solution, while others would rather leave it in expert hands.

• Rudimentary anti-fraud tools perform a specific, single function. They are typically integrated into online shopping carts and ecommerce platforms. These tools use machine learning algorithms to identify fraudulent transactions through IP geolocation, validate email addresses, conduct device fingerprinting, and verify addresses.
• Mid-level anti-fraud tools offer a wider variety of functions, including chargeback guarantees, auto declining of high-risk orders, protections against new account fraud and account takeover protection.
• Top-level anti-fraud tools offer everything the other tools offer plus outsourced case management, expertise working with large merchants, loyalty fraud management, policy abuse protection, automatic decisions, and manual review of suspicious transactions, ensuring that no good order is mistakenly declined by the software.

10. Double check that the IP address and credit card address match.

Every order placed on your online store comes from a unique, public IP address (a string of numbers separated by periods that identifies each computer using the Internet Protocol to communicate over the Internet). From the IP address, you can generally detect the city or region of the world where the purchaser is making the purchase. If this city or region does not match the address of the credit card being used, that’s a red flag.

11. Avoid non-physical shipping addresses. 

Fraudsters commonly avoid detection by protecting their physical address, preferring to use a PO box or other anonymous location. After all, the police can’t come knocking if there’s no door to knock on. 

If you are an online merchant, and if you want to prevent this type of fraud, never ship online orders to PO boxes and other virtual addresses, such as those of freight forwarders. You can spot addresses that belong to freight forwarders because they have a container number in the address, such as 726 Dock Road Suite 300 #KXQ-582899328.

Knowledge Is Power

Yes, fraudsters are getting more sophisticated in how they attack online merchants. And the number of attacks on web stores is increasing as ecommerce grows in popularity. But ecommerce merchants are also getting more sophisticated in how they detect and deter online crooks.

Once you understand what ecommerce fraud is and why it is so prevalent, and once you learn how to detect online fraud, you are empowered to take the necessary steps to prevent fraud on your online store.

It feels like there isn’t a single person alive who hasn’t bought something online. In fact, eMarketer predicts that by 2021, there will be over 230 million digital shoppers in the United States. 

This statistic comes as no surprise. After all, we have a whole internet full of goods at our disposal. After COVID forced us all to stay inside for months on end, the popularity of ecommerce has exploded. In May 2020, online store spending was up by 77% on previous years, says Forbes. And this trend is only set to continue.

Yet, it’s not enough for a business to simply think about website design at the outset, fill the site full of new products, and expect the rest to take its course. Like anything that you do, an ecommerce website needs ongoing maintenance.

Think of it as moving into a new house. At first, everything is shiny and clean. After a while though, dirt builds up, the washing machine isn’t quite doing its job, and the wardrobe door won’t shut properly.

But because you care for the house, you clean it, you replace the washing machine, and you fix the door. Basically, you maintain it.

Having an ecommerce website is much like this. You need to keep up the ecommerce maintenance on the site to make sure you have the best online presence possible. Replace products where needed and fix any problems that may occur. Give people not just a good, but a great impression as to who you are, whether you are a fashion enterprise or a B2B events development company.

Maintaining your site isn’t just about changing the color scheme or marking things as ‘out of stock’. It’s about creating great content, keeping it safe from hackers, and making sure the marketing team is doing its job.

This guide will talk you through why all this is so important and what you can do to make sure you are maintaining your ecommerce site.

Ecommerce Website Maintenance Has Benefits

The point of having an ecommerce website is to make sales. So, naturally, failing to keep your website properly maintained can lead to loss of sales. There are several ways that keeping your site fresh will help your sales figures. They include:

1. Reduced cart abandonment.

Let’s say you sell shoes. A customer is on your site and after scrolling through, they add three pairs to their cart. However, a technical glitch causes the basket to empty. Frustrated, the customer leaves the site and chooses a competitor instead.

Keeping on top of an ecommerce website means that you can spot when something is wrong and fix it straight away. Before the customer notices, and you lose out on sales.

Keeping these glitches at bay, then, helps arrest your customer churn. You’ll lose fewer customers to your competitors. Anyone who’s looked into customer churn analysis will tell you how beneficial that can be to your business. 

2. Better user experience. 

Think about things from a user’s point of view, and how you navigate around any site.

Now consider how your site is laid out. Are new products showing on the landing page? Are contact details easy to find?

 It may be that as you have added more products to your pages, things have become jumbled. So, it’s important to maintain a clear website, ensuring navigation is straightforward. It’s all about being clear and organized. 

You can link your website maintenance to other business processes here, too. Your product mapping, for instance, can help you plan out where to put products on your site and how to link them together.

 Maintaining an ecommerce website ensures a smooth shopping journey and user experience from start to finish. Meaning customers will be much likelier to return.

There are lots of  landing page examples across niches that show strong awareness of user experience. Skullcandy is a great example of a successful ecommerce site that gives great customer experience. Look at the following screenshots from the brand.

Source: Skullcandy

They show some of their most popular products on the above landing page. Then, once clicked on, customers instantly have the option to add to their cart. The product pages aren’t filled, making it very easy for the customer to choose an item and check out.

Source: Skullcandy

What Can Happen if you Don’t Maintain Your Ecommerce Website? 

Maintaining your ecommerce website is critical. Not doing so can cause you to lose revenue. Worse yet, in extreme scenarios poor maintenance may cause your business to shut down. Here are a few issues that may occur if you don’t care for your ecommerce platforms. It should be apparent how some or all of them could spiral out of control:

1. More prone to hackers.