1、COMPLIMENTS OF:RETAILCOMMERCE 360MAY 2023Payment trendsCryptocurrencyBuy now,pay laterFraud preventionPayment trendsTHE PERFECTPURCHASEEXPERIENCE Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360CHARTSOnline retailers add more payment options for shopp

2、ers.4Jewelry,automotive parts,and apparel retailers lead in offering BNPL.33Young shoppers are most likely to use BNPL .38EDITORS NOTEHAVING THE CHECKOUT PAGE THAT GETS IT DONE .3IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD FOR RETAILERS?.8WILL AI POWER ALL OF FRAUD MANAGEMENT?.19BNPL IS

3、A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS.31SPONSORBuilding the perfect purchasing experience in ecommerce today .6 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360The shopper is acquired.The product is in the cart.The consumer is on the checkout

4、 page.This is it.Make or break time.Will the shopper click buy or abandon the cart?This is where online retailers hold their breath to see if they can get this shopper across the finish line.That means the checkout interface is pretty darn important.Retailers need to pay special care to many factors

5、 including how many fields they require shoppers to fill out,how many pages are in the checkout experience,how many and which payment options are offered,if returning customers can save their information and what fraud prevention measures are in place.All these factors matter to both retailers and s

6、hoppers.32%of online shoppers say a fast checkout would lead them to place an order online,according to a Digital Commerce 360/Bizrate Insights survey of 1,060 online shoppers in January 2023.For merchants,44%of retailers said investments to key pages like the shopping cart were very important to im

7、proving their conversion rates,and 37%rated it as somewhat important,according to a Digital Commerce 360 survey of 75 online retailers in February 2023.In that same survey,29%of retailers said investment in reducing the steps at checkout was very important and 38%said somewhat important to improving

8、 conversion rates.HAVING THE CHECKOUT PAGE THAT GETS IT DONEeditors noteTHE PERFECT PURCHASE EXPERIENCE HAVING THE CHECKOUT PAGE THAT GETS IT DONE 4This Strategy Insights,“The Perfect Purchase Experience,”dives into three aspects of the checkout experience:the growing trend of offering buy now,pay l

9、ater,the ways in which artificial intelligence can enhance fraud prevention and the nascent landscape of paying with cryptocurrency.Retailers should pay close attention to which types of payment methods shoppers want to pay for goods.Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rig

10、hts reserved.RETAILCOMMERCE 360ONLINE RETAILERS ADD MORE PAYMENT OPTIONS FOR SHOPPERSShare of Top 1000 retailers*offering a sample of payment methods in 2022 and 2019*Data presented for retailers on which there is data for both years.Source:2023 Digital Commerce 360 Top 100059.9%49.8%40.2%10.8%22.1%

11、7.1%17.2%14.2%15.0%8.1%13.4%2.1%11.7%0%10.5%11.7%6.5%2.1%1.2%1.2%20222019Gift cards/certificatesApple PayGoogle PayAmazon PayAffirm(BNPL)Klarna(BNPL)Afterpay(BNPL)Private-label credit cardVenmoBitcoinTHE PERFECT PURCHASE EXPERIENCE HAVING THE CHECKOUT PAGE THAT GETS IT DONE 5Because if the right opt

12、ion isnt there,they will abandon their carts.The vast majority of Top 1000 retailers allow shoppers to pay with credit cards.But other budding payment methods are worth taking a look at.At 55%,the majority of Top 1000 online retailers allow shoppers to pay in installments.Thats up considerably from

13、just a few years ago,when only 28.2%of Top 1000 retailers offered buy now,pay later in 2020.If merchants havent considered offering buy now,pay later to their shoppers,now might be the time to look into it.But what about merchants that have a different type of clientele than shoppers looking to spre

14、ad out payments?Perhaps cryptocurrency is more the right fit of a payment method to offer those shoppers.Only 2%of the Top 1000 online retailers offer this payment method.But that still is notable for a form of currency that didnt exist 15 years ago and isnt backed by a government.And of course,the

15、checkout problem all merchants battle:fraud.Most retailers have implemented some type of fraud prevention software.But criminals learn and adjust.And technology needs to keep up.Many have implemented artificial intelligence as the answer to this perennial problem.So take a moment to dive into these

16、articles to learn how online retailers are improving their checkout pages,the results theyve seen and what investments are worth it.Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360 April Berthene,Editor,Strategy Insightssponsored articleBUILDING THE P

17、ERFECT PURCHASING EXPERIENCE IN ECOMMERCE TODAYAn executive conversation with Roxy Couse,head of experience strategy,Bloomreachto enhance the purchasing experience while also prioritizing ones with the greatest ROI.Data privacy and security is also in the spotlight,and retailers must make sure that

18、customer data is secure and private.Retailers need to manage their supply chain effectively to ensure products are delivered on time and in good condition.Personalization is necessary,but retailers struggle with what it means and finding the balance between personalization and privacy.Competition is

19、 fierce.Maintaining table stakes while also driving toward differentiating themselves from their competitors to attract and retain customers is an ongoing challenge.Consumer preferences are constantly evolving,and retailers must keep up with these changes to remain relevant.What do the most successf

20、ul retailers purchasing experiences look like?A solid,user-friendly website is mobile-optimized,offers detailed product information and allows consumers to navigate through their shopping journey with ease and complete their tasks.The site provides a frictionless path all the way from the upper funn

21、el to the time they receive a notification that their order has arrived on their doorstep.The experience is personalized and makes the customer feel valued.It provides flexible payment options and fast shipping,while also allowing for easy returns.Additionally,successful retailers prioritize custome

22、r service because they know how important this is to creating a best-in-class purchasing experience.Retailers should consider partnering with a technology company that helps them create the perfect purchasing experience for their customers because they understand what it takes to win in todays exper

23、ience economy.Bloomreach,for example,focuses on the critical areas that are going to be the most impactful for their business and their consumers.We understand how to build measurable experiences that meet your consumer expectations and maximize conversion and revenue for your business.For forward-t

24、hinking retailers,curating the perfect purchase experience is a top-line priority.As ecommerce booms,so does competition among online retailers.A great digital experience must hit all consumer touchpoints from search and discovery to post-purchase.A retailers goal should be to turn every consumer in

25、to a customer for life.Digital Commerce 360 spoke with Roxy Couse,head of experience strategy at Bloomreach,about the essential elements that go into building the perfect purchase experience for customers.What new trends have emerged around the customers purchasing experience?Customers now expect a

26、more personalized experience that caters to their preferences and needs.This includes personalized product recommendations,search results and even tailored messaging and content.They value convenience and expect their purchasing process to be easy and efficient.They expect fast shipping,an easy retu

27、rn process and streamlined checkout.They also want to be able to shop seamlessly across multiple channels.Finally,customers today want to see relevant products that meet their needs.But retailers should also show them complimentary items to help them build their basket and increase average order val

28、ue.Disjointed site experiences lead to customer frustration.How has this led to a greater focus on payments and fraud?More consumers are shopping on mobile devices,which means retailers must focus on secure and mobile-friendly payment options.Contactless payment is the new norm.Consumers want conven

29、ience,and this type of payment creates a seamless,frictionless purchasing experience.Fraud prevention is a must.Consumers expect retailers to take measures to prevent fraud and protect their personal and financial information.What challenges do retailers face trying to get the purchase experience ri

30、ght?Retailers are confronting several challenges in todays ecommerce environment.Consumer expectations are higher than ever so retailers need to meet or exceed expectations to retain customers and remain competitive.Retailers may experience limitations and prioritization challenges in implementing t

31、he right technology“Im not a cryptocurrency trader.I dont want cryptocurrency on my balance sheet,”says David Kaplan,chief operating officer of luxury watch reseller WatchBox.But,he adds,it is worthwhile to offer cryptocurrency as a payment option to customers.This holds especially true for the reta

32、ilers international customers,he says.WatchBox noticed an increase in cryptocurrency transactions in 2021,which continued into the beginning of 2022,Kaplan says.Over the last two years,$10 million of WatchBoxs online sales have been from cryptocurrency transactions at checkout.This is a small,single

33、-Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360BY GRETCHEN SALOIS Cryptocurrency payments are still a nascent payment form for online retailers.And rightly so,as the digital currency is notoriously volatile the value can change dramatically in any s

34、ingle day.Two top online retailers that accept cryptocurrency payments have outsourced the headache of complying with ever-changing regulations and money-laundering worries to appeal to consumers with cryptocurrency to spend.IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD FOR RETAILERS?THE P

35、ERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?9digit portion of the luxury watch resellers roughly$500 million in total sales over the last two years.But within this$10 million,some of the transactions are more than$1 million in cryptocurrency.This is much higher

36、 than WatchBoxs normal average order value,which is$25,000,according to Digital Commerce 360 data.“Then we have the normal run-of-the-mill$10,000,$20,000 or$50,000 transactions,”Kaplan says.Several high-dollar cryptocurrency transactions skew the average order value higher,Kaplan says.As a result,cr

37、yptocurrency transactions tend to have a higher AOV of$80,000,he says.The median order value for online cryptocurrency orders is$20,000,which is more in line with the retailers non-cryptocurrency transactions,Kaplan says.The volatile nature of cryptocurrency places both consumers and retailers at ri

38、sk.But that hasnt stopped top online retailers WatchBox and S(owned by Market America),from offering Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360“If we get into a dispute with American Express,they almost always side with the client.The transactio

39、ns are reversible.With cryptocurrency,once you have the money,you have the money.”David Kaplan,chief operating officer,WatchBox THE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?10 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RE

40、TAILCOMMERCE 360it as a payment method to their shoppers.Both retailers outsource processing these payments and pay a per-transaction fee to bypass processing cryptocurrency payments in house.WatchBox says international customers increasingly prefer to pay with cryptocurrency instead of paying via w

41、ire transfer.And Ss chief operating officer Steve Ashley says its worth the“low costs”to offer cryptocurrency to appeal to younger shoppers.There is a lot of work involved to keep current on ever-changing regulations and fluctuating pricing work that WatchBox and S prefer to delegate to their vendor

42、.Its up to retailers to perform due diligence when researching whether to offer cryptocurrency at checkout and if so,how.WHAT IS CRYPTOCURRENCY?Cryptocurrency is a digital currency that is a hybrid between a currency and a digital asset.As a currency,it can be used to pay for things.As a digital ass

43、et,consumers can invest in it to earn more.Cryptocurrency payments are encrypted using blockchain technology.The biggest difference between currency and cryptocurrency is that cash is issued by a government,whereas cryptocurrency is not.Cryptocurrency is not controlled by an individual,institution o

44、r other authority.Cryptocurrencys price fluctuates based on supply and demand when theres less of it,the price can increase because more people want it.These fluctuations often happen quickly and dramatically.Some view cryptocurrency as a risk because it is not regulated like traditional stocks.Unli

45、ke stocks,cryptocurrencies are bought and sold on cryptocurrency exchanges where fees frequently fluctuate,Percent of Top 1000 retailers that offer any kind of cryptocurrency payment at checkout.1.9%Source:Digital Commerce 360THE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WOR

46、TH THE REWARD?11 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360whereas stocks are government-regulated securities that can be bought and sold through a traditional brokerage or mobile app.Many cryptocurrency transactions are in digital currencies li

47、ke bitcoin,USDC and ethereum.Stable coins are a type of cryptocur-rency where the value of the digital asset,or digital coin,is fixed to another form of currency.This includes currency like the U.S.dollar or a precious metal,such as gold.Stable coins are considered more likely to retain their value

48、compared with currencies.To use cryptocurrency,a consumer needs to have a digital wallet.The digital wallet can be accessed from anywhere in the world and used to make online purchases.WatchBox outsources its cryptocurrency transactions through third-party cryptocurrency payment services provider Bi

49、tPay.BitPay allows merchants to accept cryptocurrency payments.At checkout,the customer pays using her digital wallet including Coinbase,Exodus,Metamask,Eletrum,among others,in BitPay.Shoppers pay the invoice to BitPay at a locked-in exchange rate.They do not need a BitPay account to complete the tr

50、ansaction.BitPay converts digital currency from transactions into local currency like dollars or euros.It deposits that money into the retailers account the next day.WatchBox does not have to handle cryptocurrency directly.RETAILERS SLOW TO ADOPT CRYPTOCURRENCY AT CHECKOUT Its the risky nature of cr

51、yptocurrency that could explain why most retailers do not currently offer shoppers the option to pay with cryptocurrency at checkout.Only 1.9%of Digital Commerce 360s Top 1000 retailers,or 19 retailers,accepted any kind of cryptocurrency at checkout in 2022.Thats down compared THE PERFECT PURCHASE E

52、XPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?12 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360with the 22 merchants or 2.2%of the Top 1000 that offered cryptocurrency payments in 2021.Data is based on Digital Commerce 360 analys

53、is of 986 retailers with two years of data within the Top 1000.The most popular cryptocurrency Top 1000 retailers offer is bitcoin,with 11 merchants offering bitcoin payments in 2022,down from 22 merchants offering bitcoin in 2021.Retailers reluctance to offer cryptocurrency is not a surprise given

54、the series of scandals,sell-offs and other disruptions in 2022.In May 2022,bitcoin and other cryptocurrency values plummeted.Cryptocurrency exchange Coinbase reported$30 million quarterly losses and said it lost more than 2 million active users.Cryptocurrency exchange FTX filed for bankruptcy in Nov

55、ember 2022 after a jump in customer withdrawals.Following this,FTXs former CEO Sam Bankman-Fried was arrested for allegedly lying to investors and committing fraud.This drove cryptocurrency values down.The collapse of venture-backed Silicon Valley Bank fueled further unrest in cryptocurrency value.O

56、nly recently in March and April 2023 have cryptocurrency values begun trending upward again.On April 11,bitcoin surged above$30,000 for the first time since June 2022.Retailers can face legal ramifications if they dont do their due diligence on accepting cryptocurrency,says Alex More,head of litigat

57、ion at law firm Carrington Coleman,where he specializes in securities and fiduciary duty litigation and blockchain technology.Using third-party vendors like BitPay to process the cryptocurrency transaction is practical for merchants,he says.“All of the conversion and payment processing happening at

58、the detailed level and all the risk and liability associated with touching the cryptocurrencies is on the third-party vendor,”More says.WatchBoxs average order value for cryptocurrency transactions.$80,000 THE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?13 Cop

59、yright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360“If youre a retailer who doesnt want exposure to the legal issues or complexities of managing cryptocurrency payments,but wants to offer it,third-party financial institutions make it accessible,”More says.C

60、urrently,1.1%of Top 1000 retailers,or 11 retailers,use BitPay.Besides Bitpay,other vendors that offer this service to retailers include Amber,BitGo,B and others.CRYPTOCURRENCY PAYMENTS DECLINE AT SHOP.COM IN 2022 S began offering cryptocurrency at checkout in August 2021.“Back then,people told me,I

61、love it!followed by,But Ive never bought anything using bitcoin before,”says Ss Ashley about shoppers reactions.“If youre a very large national or international retailer and offering cryptocurrency will increase sales by even 1%,it might be worth it.But for most smaller retailers,they need to ask th

62、emselves:What really is the business purpose of adding this?”Alex More,head of litigation,Carrington Coleman M800.MELISSA(635-4772)Trust the Address Experts to deliver high-quality address verifcation,identity resolution,and data hygiene solutions.Contact us for a Free Proof of Conceptand ask about

63、our 120-day ROI Guarantee.Well Help You Keep It Clean Dealing with bad data is a task no ecommerce business needs on their checklist.Inaccurate,outdated,and duplicate records can build up in your database,affecting your conversion rates,the customer experience,and your bottom line.As the Address Exp

64、erts,Melissa helps our customers achieve data-driven success with the best Address Verifcation,Identity Verifcation and Data Enrichment solutions available.We validated 30 billion records last year alone,which is why thousands of businesses worldwide have trusted us with their data quality needs for

65、 37+years.BAD DATA BUILDUPAbandoned Shopping Carts Address Correction Fees Fraud&Chargebacks Real-time Address VerifcationType-ahead Address Autocomplete Identity Verifcation DATA CLEANLINESSTHE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?15 Copyright 2023 Dig

66、ital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360After a tumultuous 2022 in the cryptocurrency world,the number of customers paying with cryptocurrency decreased at S.Whats more,shoppers inquiring about using cryptocurrency on S also decreased,he says.Prior to FTXs cras

67、h in November 2022,cryptocurrency accounted for as much as 7%-10%of Ss overall sales,Ashley says.Currently,cryptocurrency payments account for 1%-3%of Ss overall sales,he says.S uses BitPay,which charges the retailer a 1%transaction fee,Ashley says.When the retailer first started offering cryptocur-

68、rency as a payment option at checkout,it created cryptocurrency tutorials on its website for how shoppers could pay with this option on S.Web traffic to Ss informational videos averaged about 10,000-15,000 views.Webinars averaged about 600 viewers each during the first three to six months after laun

69、ching cryptocurrency,Ashley says.After that,views dropped significantly,he says,without revealing more.The majority of Ss customer base is female and between the age of 40-45.Cryptocurrency shoppers,however,are more likely to be younger,Ashley says,without revealing details.“When it comes to the fut

70、ure of the cryptocurrency paying customer,its going to be a younger demographic,”Ashley says.He believes younger consumers have seen the potential benefits of a decentralized financial world despite the recent fallout of FTX and regional banks like Silicon Valley Bank,he says.Steve Ashley,chief oper

71、ating officer,STHE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?16 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360THE COST OF OFFERING CRYPTOCURRENCY Cryptocurrency is another payment option online retailers can

72、 offer to shoppers in addition to credit cards.On average,it costs retailers 1%of the transaction in fees,depending on the volume of cryptocurrency transactions that merchant processes monthly.Compared with credit cards,which financial services company Bankrate LLC says can charge 1.43%-3.5%,cryptoc

73、urrency can be a cheaper payment to process for retailers.WatchBox says its international customers like to pay with cryptocurrency instead of wire transfers.While wire transaction sales have not decreased,Kaplan says the majority of WatchBoxs cryptocurrency transactions are payments that would have

74、 been wire transfers otherwise since a large portion of those are from international customers.Domestic outgoing wire transfer fees range from$0-$35 for the shopper.International outgoing wire transfer fees fall between$35-$50,according to Bankrate.International wire transfers can take two to five b

75、usiness days to process.A BitPay transaction can take five minutes to three hours to be confirmed,depending on network traffic,according to BitPay.BitPay charges the following fees to retailers for monthly cryptocurrency transactions:Less than$500,000:2%+$0.25$500,000$999,999:1.5%+$0.25$1 million or

76、 more:1%+$0.25 Coinbase,a cryptocurrency exchange platform for consumers to buy and sell several types of cryptocurrencies,also has a network of THE PERFECT PURCHASE EXPERIENCE IS OFFERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?17 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All r

77、ights reserved.RETAILCOMMERCE 360participating retailers that Coinbase consumers can shop with directly for a flat 1%transaction fee.Coinbase also converts cryptocurrency to U.S.dollars for merchants that want it,says Lauren Dowling,head of product,developer payment services at Coinbase.AVOID FRAUDU

78、LENT TRANSACTIONS WITH CRYPTOCURRENCY From a fraud standpoint,cryptocurrency is also a plus,WatchBoxs Kaplan says.The retailer relies on BitPay to validate cryptocurrency transactions.But for credit card transactions,WatchBox has spent a“lot of energy”validating its credit card transactions through

79、fraud prevention technology,he says.“Because as a retailer,youre on the hook for fraud,”Kaplan says.“If we get into a dispute with American Express,they almost always side with the(shopper),”Kaplan says.“The transactions are reversible.With cryptocurrency,once you have the money,you have the money.”

80、BitPay is based in the U.S.,and its the vendors job to keep up with and follow rules and regulations,says Merrick Theobald,Bitpays vice president of marketing.BitPay tells merchants,“You dont need to know anything about cryptocurrency,”because BitPay ensures payments go through,and there are no char

81、gebacks.Once that payment is pushed through BitPay and its moved over to the merchant,it cant be reversed,Theobald says.“Thats why a lot of merchants actually accept cryptocurrency in addition to the cross-border aspect of it and lower rates/fees,”Theobald says.THE PERFECT PURCHASE EXPERIENCE IS OFF

82、ERING CRYPTOCURRENCY AT CHECKOUT WORTH THE REWARD?18 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360BitPay takes on the risk,Theobald says.It accepts the cryptocurrency payment and deposits cash into the retailers account the next day.Outsourcing cry

83、ptocurrency processing is necessary for WatchBox,Kaplan says.BitPay ensures the retailer isnt breaking any laws,including the Know Your Customer regulations.These are guidelines businesses must follow to ensure they collect legitimate identifying information from customers to avoid money laundering

84、or fraud.BitPay monitors anti-money-laundering processing by requiring consumers to upload a form of government identification and a selfie.This is especially important because WatchBox sells portable and valuable items watches,Kaplan says.PROCEED WITH CAUTION Even with a third-party vendor,Carringt

85、on Colemans More urges retailers to be wary of accepting cryptocurrency just for the sake of it or because its trendy.Currently,the U.S.Securities and Exchange Commission is investigating a number of cryptocurrency entities.It remains unclear how the government will establish and enforce regulations

86、 on cryptocurrency and how it will affect those buying,spending and accepting it.“There should be some business reason for why retailers believe it would be beneficial,”More says.“If youre a very large national or international retailer and offering cryptocurrency will increase sales by even 1%,it m

87、ight be worth it.“But for most smaller retailers,they need to ask themselves:What really is the business purpose of adding this?”More adds.“It makes the most sense for retailers who are either directly in the cryptocurrency space or are adjacent technology companies like Newegg,which sells computer

88、components.” Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360BY APRIL BERTHENE Fraud prevention technology powered by artificial intelligence can improve the fraud-fighting operations for many merchants.Still,most online retailers employ manual review

89、 teams to further review transactions the software flags as risky.But some merchants hoping to increase efficiency are looking to eliminate manual review altogether and have AI make all the fraud decisions.WILL AI POWER ALL OF FRAUD MANAGEMENT?Artificial intelligence might be doing Chad Funks job in

90、 five years,the fraud analyst at BrooksR tells Digital Commerce 360.“Machine learning and AI are very much the future of this industry,”Funk says.Funk heads up the manual review team at the sports shoe and apparel manufacturer,where he approves or denies transactions that its fraud prevention provid

91、er has flagged as possible fraud.But this role,he says,is likely to disappear in five to 10 years.“Manual review will go away.There wont be any need for it because AI can do it better and faster,”he says.But right now,Funk is confident his team is still necessary to prevent fraud.BrooksR has a THE P

92、ERFECT PURCHASE EXPERIENCE 20 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360manual review rate of 1.2%of all transactions and a chargeback rate of 0.02%,he says.These numbers are“quite good,”in his view,and better than industry benchmarks that hes s

93、een.The average chargeback rate for an ecommerce merchant is 0.49%,according to a July 2022 survey of 60,000 merchants from fraud prevention vendors Chargebacks911 and Card Not Present.“For humans,if they are good at their jobs,humans can still outpace AI,”Funk says.“Its not at a level it truly need

94、s to be at to kick people out of a position,”he adds.Many in the industry agree artificial intelligence can get an online retailer most,if not all,the way there in preventing fraudulent transactions.But humans are still needed in some capacity to fight fraud.For many,thats a manual review team to fu

95、rther investigate a transaction with certain attributes that have triggered the machine to flag it as risky.But others say with AI-based fraud prevention,manual review teams to review transactions will not be needed in the future,or even today.THE COST OF FRAUD AND MANAGING FRAUD Fraud is an expensi

96、ve problem.A report from fraud prevention vendor Signifyd finds that for every$100 in fraud order losses,merchants actually incur a$207 loss,which accounts for the cost of the product,fulfillment costs,operational costs,marketing costs to acquire the customer,processing the sale and then the chargeb

97、ack fee.Chargebacks are a common way retailers know criminals have stolen goods from them.A chargeback is when the credit card company reverses the charges for an item so the merchant pays for the item instead of the shopper.This typically happens because a WILL AI POWER ALL OF FRAUD MANAGEMENT?“The

98、 fraudster will never go away.They will pick on someone until they find someone who is not fighting back hard enough.”Chad Funk,fraud analyst,Brooks RunningTHE PERFECT PURCHASE EXPERIENCE 21 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360criminal sto

99、le a shoppers credit card credentials and used them to make a purchase.When the legitimate consumer sees the charge for an item she did not make,she will call the credit card company to dispute the charges.Other expenses are the software and employees to review transactions for fraud.Many online ret

100、ailers license technology from fraud prevention companies that approves or denies transactions.Typically,these vendors charge a fee for each order that its software reviews.Vendors also may charge to cover the cost of any chargebacks that its system approved that end up being fraudulent.This gives i

101、nsurance to the retailer,as it will cost the vendor for any mistakes it makes.But,it may mean that vendors flag more transactions for manual review to protect against these costs.A manual review costs retailers,as merchants dedicate employee time to reviewing transactions that the technology has dee

102、med risky and needs further review before approving.Chad Funks job at Brooks Running is an example.The more transactions that are deemed risky,the more time it takes for manual review,as the volume is greater.Funk says it takes,on average,90 seconds to approve or deny a flagged transaction,with each

103、 review ranging from a few seconds to 10 minutes.Fraud prevention software typically uses a combination of rules and artificial intelligence to score each transaction for the possibility of fraud.Transactions that are below a certain fraud score are approved,transactions above a certain number are d

104、enied and a portion are flagged to be further reviewed by humans.Rules can vary by merchant.Some may choose to review all transactions that are in the hardware category that are more than$250 dollars,or to review all gift card transactions purchased with an email that has been in use for one year or

105、 less.WILL AI POWER ALL OF FRAUD MANAGEMENT?Dollar loss retailers incur for every$100 of fraudulent orders.$207Source:SignifydTHE PERFECT PURCHASE EXPERIENCE 22 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360AI-based systems can layer these rules on

106、top of thousands of other attributes about a transaction and adapt as patterns of shopper behavior change.Andras Cser,a Forrester Research Inc.analyst focusing on security and risk management,recommends retailers use AI in combination with rules to reduce chargebacks and manual reviews.“Use multiple

107、 risk-scoring layers.Look at transactions in comparison to the persons previous transactions or a peer groups previous transactions,”Cser says as advice for merchants to block fraud.REDUCING FALSE POSITIVESWhen software flags a transaction as possible fraud but the transaction is actually legitimate

108、,that is called a“false positive.”AI reduces false positive rates by at least 20%-30%,and in some cases by 85%-95%,Cser says.At sports apparel merchant Sportitude,of all its credit card transactions,about 1%-2%transactions are flagged for fraud,says Roumen Staykov,CEO of Sportitude.Of those,more tha

109、n 90%are actually fraud,Staykov says.This is good,he says,as it means its system is producing relatively few false positives.This is beneficial for both shoppers who are not inconvenienced by having to authenticate their purchase and the merchant.For example,once the software flags an item as potent

110、ially fraudulent,two senior members of Sportitudes customer service team will manually review each transaction.At times,this means calling the shopper to verify the purchase.That takes employee time.In fact,after switching its fraud prevention vendor to ClearSale,which uses artificial intelligence t

111、o score transactions,Sportitude reduced its false positive rate,Staykov says without stating the WILL AI POWER ALL OF FRAUD MANAGEMENT?“Human investigators have individual and collective expertise,and a human hunch or intuition about fraud patterns is something that machines cannot replicate.”Andras

112、 Cser,security and risk management analyst,Forrester Research Inc.THE PERFECT PURCHASE EXPERIENCE 23 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360decline.Now,its employees can focus more on customer service rather than manually reviewing transactio

113、ns.“It used to be a lot more time,”Staykov says.“It would be a larger percent of that persons role.The more frequently it occurs,it takes a lot more time out of day,follow up and investigating.”LETTING AI MAKE ALL THE DECISIONSE-retailers can eliminate 100%of employee manual review time by putting A

114、I in complete control,as online cryptocurrency exchange company Paybis has done.Paybis previously had about 15 employees reviewing transactions flagged for fraud.But these employees now have new responsibilities since Paybis switched to having all its transactions approved or denied via its AI fraud

115、 prevention software,says Andrei Ialama,chief operating officer.Paybis is an online platform that allows shoppers to buy cryptocurrency with credit and debit cards.Fighting fraud is an important aspect in selling cryptocurrency because of the nature of the digital good,which is decentralized and ano

116、nymous,Ialama says.When Paybis launched in 2014,cryptocurrency was popular only with geeks and enthusiasts,he says.As digital currencies became more known,Paybis transaction volume increased and it needed to upgrade how it approved transactions to efficiently scale its business,he says.Paybis went f

117、rom reviewing each transaction manually when it launched to a hybrid approach of about 50%of transactions requiring manual review and the other half being approved or denied via a rules-based fraud prevention system.WILL AI POWER ALL OF FRAUD MANAGEMENT?Roumen Staykov,CEO,SportitudeTHE PERFECT PURCH

118、ASE EXPERIENCE WILL AI POWER ALL OF FRAUD MANAGEMENT?24After learning more about fraud patterns on its site,eventually Paybis refined its rules and began approving 75%of its transactions with the software and only reviewing 25%of purchases,Ialama says.But a rules system could only get Paybis so far.

119、The exchange platform did not want to have its customers wait 30 minutes to an hour to approve potentially fraudulent transactions when customers expect to immediately receive their digital currency,he says.And criminals are always changing their behaviors.“AI has the capability to include way more

120、factors and make a decision based on that,”Ialama says.“The fraudster gets to know the rules in relatively quick time.”For example,Paybis may block transactions with a certain bank identification number(BIN),the first few digits on a payment card number that identifies the bank that issued it.After

121、a few days,the criminal will figure this out and will switch to a new BIN,Ialama says.This is why it started to look for an AI-based fraud prevention system and made the switch to vendor nSure.ai in January 2022.It took about two months to integrate the system,plus nearly a three-month period of“lis

122、tening”in which the AI system worked in the background to learn about how legitimate and criminal consumers used Paybis.Both Paybis and nSure.ai closely monitored the system before completely letting the AI take over,Ialama says.Now 100%of Ps transactions are approved by the AI software,with no manu

123、al review.Paybis rejects about 10%of transactions on its site,compared to 20%before,while its chargebacks rate has improved,Ialama says without sharing the rate.Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360“AI has the capability to include way more

124、 factors and make a decision based on that.The fraudster gets to know the rules in relatively quick time.”Andrei Ialama,chief operating officer,PaybisHILTON CHICAGODC360EVENTS.COMEnvisionB2B is Back!Join Us June 20-22,2023 in ChicagoAn Innovative&Immersive B2B Ecommerce Learning EventWhere Ecommerce

125、 Strategy&Action MeetENVISIONB B2DIGITAL COMMERCE 360 EVENTBrent SteffenDirector,EcommerceCaterpillar Inc.Sandy MattinsonChief Merchandising OfficerZoro,W.W.Grainger Inc.John HillCDO and Senior Vice PresidentMSC Industrial Supply Co.Jim LymanVP,Ecommerce&Customer EnablementPerformance FoodserviceVel

126、inda CoxSVP,EcommerceKonica MinoltaFEATURED KEYNOTE SPEAKERS INCLUDE:THE PERFECT PURCHASE EXPERIENCE WILL AI POWER ALL OF FRAUD MANAGEMENT?26 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360One of the more notable changes to using nSure.ai is that Pay

127、bis catches“fraud waves”faster.A fraud wave is when a merchant gets a sudden influx of fraudulent activity on its site.This is likely because a criminal has found a vulnerability in the site and will work as fast as possible to exploit it before the system catches up.An artificial intelligence syste

128、m can find the pattern faster than a rules-based system or a manual review team,Ialama says.But humans still play an important role in fighting fraud,he says.Paybis employees who previously worked on the manual review team have new responsibilities,including reviewing the approved and denied transac

129、tions after the fact.Paybis employees will review each one to see patterns the AI system detected,or if Paybis does incur a chargeback,the employee will review why.Employees can then note in nSure.ais platform which transaction it approved that resulted in a chargeback,so the system can learn and bl

130、ock transactions that follow a similar pattern in the future.REMOVING MANUAL REVIEW FROM FRAUD PREVENTIONHaving a human look for patterns of fraud and then update an artificial intelligence model after the transaction takes place is the most efficient way to incorporate humans into fraud fighting,sa

131、ys Kris Zanuldin,vice president of product at fraud prevention vendor Forter,whose technology is AI-based.Like most fraud prevention vendors,Forter has a team of fraud analysts who research and identify new patterns of fraud to feed into its AI model.That ensures the system will pick up these patter

132、ns more quickly than if it had to learn about them gradually,by allowing bogus purchases to go through.Like nSure.ai,Forter does not“flag”any transactions for manual review,but allows merchants to either accept or deny transactions.THE PERFECT PURCHASE EXPERIENCE WILL AI POWER ALL OF FRAUD MANAGEMEN

133、T?27“Leveraging artificial intelligence,you are removing the human as the bottleneck,”Zanuldin says.And the human bottleneck of having a queue of transactions to review is real.Brooks Running can see it magnified during the holidays.Gift cards are a common gift late in the season and also a high fra

134、ud category because they are easy to resell,Funk says.Those transactions often trigger its fraud prevention system and Brooks Running needs to approve each one,even the ones made on the driveway before the Christmas Day party starts.“In the future with AI,you will not have to man someone on Christma

135、s Eve and Christmas Day.It will be a seamless experience,that as soon as they order they will get it,”Funk says.Like with Christmas Day gift cards and cryptocurrency purchases,the immediacy of getting a product as soon as the customer buys it is increasingly important in ecommerce,Forters Zanuldin s

136、ays.For example,if software flags a transaction of a hot product for fraud,in the few hours it takes for a manual review team to review and approve it,the product could be sold out.Then,that shopper does not receive the product.Another example is for a buy online,pick up in store order.Shoppers ofte

137、n expect the product to be ready for pick-up within an hour or two of placing the order.This is something that would be difficult to achieve if the transaction is flagged for fraud and must be manually reviewed.But many merchants are not ready for this completely hands-off approach.“AI will never co

138、mpletely replace traditional,rules-based systems in fraud management,”Forresters Cser says.Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360The average chargeback rate for an ecommerce merchant.0.49%Source:July 2022 survey of 60,000 merchants,Chargebac

139、ks911 and Card Not PresentTHE PERFECT PURCHASE EXPERIENCE WILL AI POWER ALL OF FRAUD MANAGEMENT?28Thats because humans can recognize and understand unique patterns of fraud better than AI can,he says.“Human investigators have individual and collective expertise,and a human hunch or intuition about f

140、raud patterns is something that machines cannot replicate,”Cser says.Funk points to Brooks low chargeback rate as reason enough for sticking with manual reviews.His chargeback rate of 0.02%is lower than what complete-AI fraud prevention vendors have quoted him when hes vetted them for his site.Funk

141、does note that the decision about how much to rely on AI-based automation depends on each merchants comfort level with risky transactions.A retailer could accept a higher-than-average chargeback rate if that maximizes its overall profit,including by avoiding the costs of licensing an AI-based system

142、.Paybis Ilana,however,says the artificial intelligence software uses tools his manual review did not have access to.For example,if a customer is sharing his screen at the time of purchase,there is a higher likelihood of fraud,as the criminal could be stealing shoppers data in real time.But Paybis pr

143、eviously rules-based system could not detect screen-sharing,and its manual review team did not have the plug-in required to spot such behavior.Now,nSure.ai uses this metric,layered with other factors,to accept or deny a transaction.INCREASES IN FRAUDRegardless of whether a retailer uses some AI or a

144、ll AI to combat fraud,merchants agree its important to catch fraud early before a wave starts.Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360THE PERFECT PURCHASE EXPERIENCE WILL AI POWER ALL OF FRAUD MANAGEMENT?29“They all have patterns,”Funk says ab

145、out criminals who commit online fraud.“Its all finding their pattern and catching that pattern,and then shutting them down as hard as possible in order for them to mess with someone else.”With criminals showing no signs of changing their ways,managing fraud,in whatever way merchants choose,will alwa

146、ys be a cost of doing business online.“The fraudster will never go away,”Funk says.“They will pick on someone until they find someone who is not fighting back hard enough.” Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360A World of Possibilities To Te

147、ll Your Story&Broaden Your ReachWhat Projects Can We Create?WebinarsThought Leadership&Custom Research ReportsBenchmarking DataCharts&InfographicsCase StudiesDigitalC helped countless businesses turn their research vision into a reality Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All

148、rights reserved.RETAILCOMMERCE 360Recently,O Inc.shoppers have used buy now,pay later(BNPL)for orders as low as$10,says CEO Jonathan Johnson.But Johnson isnt worried,even as some critics say shoppers using BNPL for smaller purchases is a concerning sign of growing debt.Johnson is excited to see BNPL

149、 become a bigger part of Overstocks business,especially in the case of an economic downturn,because it makes the products it sells more accessible to nontraditional customers.More retailers are adding buy-now-pay-later services every year,and as of April 2023,54%of Digital Commerce 360s Top 1000 onl

150、ine retailers offer some version of this payment type.Thats up from 45.8%of Top 1000 retailers in 2022 and 28.2%in 2020.And the biggest retailers are joining in,with A Inc.adding BNPL through vendor Affirm Inc.in BY MARY MEISENZAHL Executives at Overstock and Forever 21 say buy now,pay later lets co

151、nsumers without access to traditional credit buy their products.But an increase in BNPL payments could lead to a debt problem,experts say.BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS THE PERFECT PURCHASE EXPERIENCE 32 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights re

152、served.RETAILCOMMERCE 360BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS 2021.Plus,Apple Inc.just added its own version of BNPL,Apple Pay Later,in March 2023.BNPL is a short-term financing option offered on the online checkout page.It allows shoppers to spread out the payment for a purchase o

153、ver a specified period.Consumers apply for the financing option with whichever vendor the retailer uses during checkout,and customers pay the smaller payments over the course of several months and without an interest fee.Instead,retailers pay the BNPL vendor a service fee per transaction,which range

154、s from 2%to 8%.Many of the large vendors pay the merchant the full order amount right away,so they dont have to wait for the customer to pay each installment to receive the payment.BNPL loans can be more attractive to consumers than traditional credit cards because they generally do not charge inter

155、est over the period of the loan,and consumers can qualify for them without a hard credit check that could show up on a credit report.Shoppers can pay for the installments using a credit card,debit card or bank account.As more ecommerce retailers offer BNPL,some consumers expect all merchants to offe

156、r the financing option.For retailers that do offer BNPL,its a way to attract younger,female shoppers who are more likely to use the service.But some industry experts suggest offering zero-interest financing on small purchases may not be feasible for long,and consumers could easily take on more debt

157、than they can handle.“The payment option should never become a reason to abandon the cart.”Jonathan Johnson,CEO and president,Overstock THE PERFECT PURCHASE EXPERIENCE 33 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360While more than half of the Top

158、1000 retailers offer buy now,pay later,the top retailers differ in which pay-in-installment vendor they offer.18.3%of Top 1000 retailers offer PayPal credit,one of PayPals versions of BNPL,14.7%offer Affirm,13.3%offer Klarna,and 11.9%offer AfterPay,with other services coming in behind.18.9%of retail

159、ers offer multiple BNPL vendors.Jewelry,automotive parts,and apparel retailers are the most likely to offer BNPL,while food and beverage companies are the least likely,according to Top 1000 data.BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS JewelryAutomotive parts/accessoriesApparel/accesso

160、riesHousewares/home furnishingsToys/hobbiesConsumer electronicsMass merchantSporting goodsHealth/beautyOffice suppliesFlowers/giftsSpecialtyHardware/home improvementFood/beverageJEWELRY,AUTOMOTIVE PARTS,AND APPAREL RETAILERS LEAD IN OFFERING BNPPercent of Top 1000 retailers offering BNPL by category

161、Source:2023 Digital Commerce 36083.3%71.8%67.1%64.3%52.8%49.3%49.0%48.1%47.4%42.3%38.1%37.3%34.9%18.4%THE PERFECT PURCHASE EXPERIENCE 34Web analytics firm Similarweb estimates global consumers will spend$300 billion in BNPL purchases in 2023,and this will increase 75%to reach$526 billion in spending

162、 by 2026.A Similarweb survey in January 2023 of 2,509 U.S.consumers found that 37%of consumers used BNPL,and 27%say theyve used it within the previous 12 months.BNPL SERVICERS TAKE ON MOST OF THE FINANCIAL RISK There are inherent risks that BNPL customers might not be able to pay all the debt they t

163、ake on,vice president of global research solutions at Similarweb Marta Sukiewicz said,but the burden is borne more by the payment servicers than by the retailers themselves.Klarna,Affirm and Sezzle all state on their merchant FAQ sections that retailers are paid immediately when a purchase is made,s

164、o pursuing additional payments if they arent made on time is up to these BNPL servicers.While retail chain Forever 21s customers using BNPL may not have room on their credit limits to purchase from them,thats not the retailers responsibility,says Jacob Hawkins,chief marketing,digital,and omnichannel

165、 officer at Forever 21.“Klarna bears all risk of a fraud transaction or a customer who doesnt end up paying after a transaction has been approved,”Hawkins says.Michael Hershfield,CEO of Accrue Savings,is more negative about potential risks.Hershfields financial technology company offers a competing

166、service,“save now,buy later.”“BNPL makes it easy for customers to overspend without realizing it,”Hershfield says.“As a result,many customers face a silent Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 36034BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW

167、CUSTOMERS 54%Percent of Top 1000 retailers that offer buy now,pay later.Source:Digital Commerce 360 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 36035accumulation of debt as they fail to meet payments and rack up on late fees.”Almost half of those who

168、 use buy now,pay later have missed a payment,according to a 2022 Lending Tree survey of 1,500 consumers.Customers who cant make payments may be charged fees and see negative impacts to their credit scores.Retailers,however,are largely insulated from those risks.For Hawkins,its not the retailers plac

169、e to tell customers what they should or shouldnt be buying or how much debt they should take on.Instead,he frames it as an issue of“inclusivity,”where as many consumers as possible have access to the brand,regardless of their larger financial situation.Overstocks Johnson spoke similarly,citing“flexi

170、bility”as key.Alibaba Groups business-to-supplier site A also offers BNPL.Alibaba says its customers are less likely to make a spur of the moment decision,so theres less risk involved.“Most of our customers are business buyers who have clear sourcing plans and do not impulse purchase,”says head of b

171、usiness partnerships for payments Cherry Tang.“Acknowledging that they are under cashflow pressure,we are offering Afterpay at checkout.Our buyers mostly opt for the service when purchasing ready-to-ship products on our platform.”THE PERFECT PURCHASE EXPERIENCE BNPL IS A LOW-RISK OPTION FOR ATTRACTI

172、NG NEW CUSTOMERS 9 UNIQUEDATABASESReveal the Performance of Leading Online Retailers Around the World:Sales Rankings&Financial Metrics Benchmarking Markets and Industries Technology Providers that Power Each RetailerDigitalC view of the ecommerce market,and where its headed,becomes clear with Digita

173、l Commerce 360THE PERFECT PURCHASE EXPERIENCE 37 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS Alibaba Group owns top global consumer marketplaces Taobao,Tmall and AliExpress.The largest risk fo

174、r retailers,Similarwebs Sukiewicz says,comes from the prospect of continuing to offer BNPL services.When the market shifts down and interest rates go up,keeping these services free for customers becomes much more costly for servicers providing these loans,who could in turn charge higher fees to reta

175、ilers.RETAILERS MUST OFFER BNPL OR RISK FALLING BEHIND Since major online retailers like Amazon have adopted BNPL,customers now expect a free financing option on every purchase and may balk at retailers that dont have one,Sukiewicz says.“Consumers dont want to change their habits,”she says.Once a sh

176、opper adopts paying in installments with a certain merchant,it will be hard for retailers to remove the feature without customer backlash,she adds.Online stores that dont have buy-now-pay-later options risk losing their business to competitors,Sukiewicz says.In Similarwebs survey,53.1%of BNPL consum

177、ers said they chose BNPL over other financing options because they have a longer term to pay off their balance before being charged fees or interest.31.9%said BNPL was their only financing option.26.7%of consumers who reported using BNPL to purchase consumer electronics said they wouldnt have done s

178、o without the financing option,potentially withholding high-ticket purchases from retailers.The percent increase in average order value for BNPL orders at Forever 21.17%THE PERFECT PURCHASE EXPERIENCE 38 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 36

179、0Other data reflects that some consumers will shop with BNPL,or not at all.In a Digital Commerce 360/Bizrate Insights survey of 1,060 consumers in January 2023,15%of online shoppers listed“preferred payment option not available”as a reason theyve abandoned digital shopping carts.7%specifically said

180、theyve abandoned carts because financing was not available.Whats more,a Digital Commerce 360/Bizrate Insights survey of 1,088 online shoppers in September 2022 found that 11%ranked flexible payment options as one of the most important factors in choosing where to shop for the holidays.CUSTOMERS USE

181、BNPL FOR BIG AND SMALL PURCHASES BNPL purchases account for a very small number of total sales at Overstock,just 2%to 3%,Johnson told Digital Commerce 360.He said theres been a“slight uptick”recently,though theyre still a small part of the business overall.Overstock,No.33 on Digital Commerce 360s To

182、p 1000,uses Swedish payment service Klarna to facilitate those sales.BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS “We think BNPL drives some incremental business for us.Theres a chunk of our customers online who dont have a credit card or dont have room on their credit card.”Jacob Hawkins,

183、chief marketing,digital and omnichannel officer,Forever 21 THE PERFECT PURCHASE EXPERIENCE 39 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360Customers who do choose to use BNPL services are mostly buying less expensive items from Overstocks catalog,p

184、riced between$10 and$400,he says.This is a wide range that encompasses Overstocks average order value of$215 in the fourth quarter of 2022,and notably includes items priced far lower than that average order.For example,a small throw pillow priced at$25.19 can be purchased through four payments of$6.

185、30 over six weeks.While Overstock notices shoppers using BNPL for smaller-ticket items,Forever 21 notices the opposite,says Hawkins.BNPL purchases make up about 15%of total online sales at Forever 21,up from 12%in 2022.The average order value for the apparel retailers digital sales is about$70,while

186、 the average buy-now-pay-later order comes in at$82.Thats a 17%increase in ticket size,which Hawkins says the apparel retailer has been“very pleased”with.Forever 21 ranks No.121 in the Top 1000.Buy now,pay later didnt make an impact on the average order value size at A,Tang says.REACHING YOUNG FEMAL

187、E CUSTOMERS Online shoppers who use buy now,pay later are slightly younger than overall consumers,according to Similarweb.40%of U.S.BNPL shoppers are ages 25-34,which is roughly the age of young BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS YOUNG SHOPPERS ARE MOST LIKELY TO USE BNPLPercent

188、of buy now,pay later shoppers by ageSource:Similarweb 202328.3%17.2%40.4%10.1%4.0%18-24-year-olds25-34-year-olds35-44-year-olds45-54-year-olds55+year-olds THE PERFECT PURCHASE EXPERIENCE 40 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360millennials,a

189、ccording to Similarweb.That age group is responsible for about 30%of all ecommerce sales in the U.S.,according to a 2022 CBRE study.Both Overstock and Forever 21 also reported that their BNPL shoppers are more likely to be female.Hawkins says more than 90%of BNPL purchases at Forever 21 are made by

190、women,compared to 77%of purchases overall.Johnson declined to provide specific numbers for Overstock,but he noted the BNPL shopper leans“younger and more female overall.”BNPL IS ABOUT CREATING AS MANY PURCHASE OPPORTUNITIES AS POSSIBLE Retailers emphasized that offering buy now,pay later is a way to

191、 remove barriers that might stop shoppers from clicking“buy.”The main reason Overstock offers BNPL as a payment option is to maximize flexibility for consumers,Johnson says.Overstocks BNPL shoppers tend to be younger than its average customers,and may not have well-established credit yet.For custome

192、rs who cant check out with a credit card,either because they dont qualify for one or they dont have a high enough credit limit,the goal is to make BNPL checkout as easy as possible,though its not yet a“perfectly smooth process,”Johnson says.Using the service still takes“a few more clicks”than paying

193、 by credit card,he says,because Klarna performs a soft credit check.This means Klarnas credit card check wont hurt a customers credit score,although failures to make payments on time could still show up on a credit report.BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERS THE PERFECT PURCHASE EX

194、PERIENCE 41 Copyright 2023 Digital Commerce 360&Vertical Web Media LLC.All rights reserved.RETAILCOMMERCE 360Its important to Johnson that“the payment option should never become a reason to abandon the cart.”Overstock also has a lease-to-own option,but it serves a different purpose than BNPL,Johnson

195、 says.Customers typically use lease-to-own to finance much larger purchases over a 12-month lease period,but Overstock did not share the specific order values.Allowing consumers who dont have credit cards or access to other forms of payment to purchase has paid off for Forever 21.In the first year a

196、fter adding Klarna,two-thirds of BNPL purchases were made by new customers.Now those buyers are split 50-50 between new and returning customers,which Hawkins hypothesizes means some of those new customers had a positive experience and returned to Forever 21.Some BNPL customers may be more likely to

197、overbuy and return products,which could be costly,but Hawkins says Forever 21 still sees a net gain from offering BNPL.“BNPL drives some incremental business for us,”Hawkins says.“Theres a chunk of our customers online who dont have a credit card or dont have room on their credit card.”Online market

198、place A launched BNPL in mid-2022 because its shoppers were asking for it.Specifically,Tang says adoption of AfterPay gives A more flexibility in making purchases.More ecommerce retailers are offering buy now,pay later as a payment option to shoppers,but there are still serious concerns to consider

199、as consumers take on more debt and expect free BNPL IS A LOW-RISK OPTION FOR ATTRACTING NEW CUSTOMERSHISTORYDecades of ecommerce experience and unique relationships built along the wayACCESSUnlock mountains of exclusive content from research reports and database rankings to charts and articlesEXPERT

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201、Empowering professionals and strengthening businesses with expert-crafted ecommerce research and data for over 20 years.Members get the best of our business.Join today to gain unlimited ecommerce resources and the support of a global community.THE PERFECT PURCHASE EXPERIENCE 43 Copyright 2023 Digita

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