Find out about the ways in which retailers can maximize eCommerce revenue during the holiday season and throughout the year.
Christmas time is widely recognized as one of the biggest online shopping periods of the year. Online sales are expected to exceed $90 billion this holiday season in the US alone. Yet despite the significant resources businesses invest in preparation for these busy weeks, heightened competition and growing consumer expectations make it harder for retailers to successfully attract the attention of savvy customers online.
In fact, many online merchants limit their ability to monetize the holiday opportunity for two main reasons: failing to devise a clear omni-channel strategy and misunderstanding international shoppers. In this post, I touch on the various ways in which retailers can maximize eCommerce revenue this holiday season and throughout the year.
Fear of the unknown: embracing cross-border holiday shoppers
Cross-border eCommerce is becoming more prevalent, with two-thirds of consumers now saying they feel more comfortable shopping with overseas retailers. The holiday season is no exception when it comes to cross-border shopping, including big spending by customers from countries where Christmas is not generally celebrated. Last year, Chinese consumers spent an estimated $55 million on US sites throughout the five major shopping days of the holiday season. This November, Riskified predicts that US online retailers will see twice as many purchases with foreign credit cards.
Breaking out of the confinement (and comfort zone) of the domestic market by expanding into uncharted territories is one of the ways eCommerce merchants can get ahead of the game. Unfortunately, many online retailers fail to fully take advantage of international consumers’ significant buying power. While some merchants simply do not accept international payment methods, others are inadvertently rejecting good international orders due to suspected fraud. Cross-border orders typically contain data points such as billing-shipping address mismatches, missing AVS information, and foreign IP addresses, that are wrongly identified as suspicious by systems designed to detect fraud in domestic transactions.
In truth, orders placed by international consumers for US shipping are 37% less likely to be fraudulent during the holiday season. Retailers who wrongly reject purchases made with foreign cards, or placed from international IP addresses, are missing out on significant revenue.
Boosting revenue with cross-cultural awareness
International customers present a significant business opportunity during the US holiday season, but also come with a whole other set of highly profitable online shopping days that US eCommerce merchants can capitalize on. For example, China’s Singles Day is now considered the most lucrative online shopping day of the year, with sales reaching $14.3 billion last year, a 60% YoY increase. Other notable non-US online shopping days include: Boxing Day in the UK, Canada and Australia on December 26th; Orthodox Christmas Day, celebrated in Russia and in Eastern Europe on January 7th; and Chinese Valentine’s Day on August 20th.
Becoming acquainted with international online shopping holidays and marketing to cross-border shoppers are a good first step. But in order to maximize eCommerce revenue from global markets, merchants must also adjust their fraud prevention measures to reduce false positive declines. For example, due to the high number of legitimate online shoppers throughout the holiday season, the rate of eCommerce fraud is actually 55% lower during the US holiday season vs the rest of the year. It would be prudent for online retailers to assume the same holds true for other high-profile online shopping days.
Keeping holiday shoppers happy with omni-channel options
International borders are not the only lines that eCommerce has increasingly allowed both retailers and shoppers to cross. With the emergence of mobile shopping and ‘click & collect’ services, the line between in-store and online shopping has become blurred. Whilst bricks and mortar stores are being draped in tinsel and welcoming customers with their favorite Christmas jingles, online retailers looking to keep shoppers satisfied this holiday season must have a successful omni-channel strategy – providing extensive shipping and shopping options (including how to find, compare, buy, and receive goods).
In-store pickup services can take the stress out of the holiday shopping rush, simultaneously bringing more customers into stores. For example, leading up to this holiday season, retail giant Walmart is not only offering 20 million online items (more than twice as many as in 2015), but is also promoting in-store pickup services – conveying to holiday shoppers that their convenience is a top priority.
Data from Google indicates that over 75% of shoppers who use their mobile device to search for a nearby service will visit a related business within a day. A recent consumer survey reveals a surprising link between retailers’ eCommerce sites and in-store sales. Shoppers who browse a retailer’s website whilst in the bricks-and-mortar location were found to spend 2.2 times more than shoppers who do not visit the online shop. These data, along with the overall growth of mCommerce, highlight the fact that providing optimal mobile functionality is key to remaining competitive. Last Cyber Monday, consumers spent $838 million on mobile devices. And a recent PayPal survey suggests that holiday shoppers will continue turning to their mobile devices this season, and will spend big. According to the survey, the largest holiday purchase made via mobile is predicted to exceed $64,000! The message is obvious: your competition is at the fingertips of increasingly discerning, big spenders.
Customer experience is key to staying ahead
Online retailers just can’t afford to leave the customer experience behind. A positive encounter for first time holiday buyers can generate sales throughout the year, with data indicating that returning customers spend three times more than one-time shoppers. Providing a robust omni-channel shopping experience and successfully catering to global shoppers will allow eCommerce merchants to make the most of the holiday season.
For actionable tips on preparing online fraud teams for the holiday season rush, download our Fraud Team Prep Guide. Riskified wishes you a safe and successful holiday season!