Online Shopping & CNP Fraud: The Gender Agenda
We analyzed hundreds of thousands of eCommerce transactions from global digital retailers to reveal some interesting findings about gender in the online market.
Last year, to mark International Women’s Day, we researched the role of gender in CNP fraud patterns, and found that males committed fraud at a significantly higher rate than females. This year we decided to revisit the topic, analyzing hundreds of thousands of eCommerce transactions from global digital retailers to reveal some interesting findings about gender in the online market.
Before I continue, a small caveat: when analyzing online orders, there is no definitive way of knowing the gender of a customer (not to mention that gender is a self-identifiable, social construct which is not always binary). But for the purposes of our examination, we used the name recorded in the customer’s billing/shipping details to determine gender, and only when these were distinctly identifiable and matched the email address provided.
Online shopping: a gender free future?
Because they control a high percentage of household spending, it’s generally accepted that women drive shopping trends. But when it comes to US online sales, men are greatly contributing to growth in eCommerce revenues, spending almost as much as women. A recent study found that 40% of 18-34 year old American males would “ideally buy everything online”, as opposed to only 33% of females.
The avid uptake of online shopping by men has meant that the gender spending gap is closing. According to Riskified’s data, males spent 10% more than females in 2016. In addition, there has been an increase in the number of customers crossing over to industries traditionally considered ‘gender-specific’. For example, over the past year Riskified observed that more orders have been placed by females in the watch and sport industries, while more males are purchasing cosmetics, food, pet and children-related merchandise.
But the most marked development this year was in the fashion industry. In 2015 the majority of fashion eCommerce orders were placed by females, but in 2016 there was almost no difference in the number of transactions made by males and females. So while spending in some industries is still dominated by one gender, the dramatic change we witnessed in the fashion industry in the span of only one year indicates that the gap is likely to close in many other industries in the near future.
But what about the gender fraud gap?
Our analysis last Women’s Day found that in industries with a prevalence of male consumers, females were more likely to commit fraud (and vice versa). In industries that saw a similar number of purchases by both genders, the rate of fraud was almost identical. The overall rate of fraud across all verticals in 2015 was 30% higher in orders placed by males.
Based on our 2016 data, orders made by females are 50% less likely to be fraud! It appears that females categorically commit less CNP fraud than males – unless of course, they’re just far better at covering their tracks, or are using male names.
So, in which industries is more fraud committed by a specific gender? In 2015, we saw a distinct difference in the popularity of certain industries among male and females fraudsters. Fashion, jewelry, cosmetics, and children’s goods were preferred by male fraudsters; while cameras, smoking paraphernalia, and auto parts saw a high rate of fraud committed by females. In 2016, however, male and female fraudsters preferred the same industries: remittances, watches, phones, cosmetics, and fashion rounded up the top five list of industries with the highest rates of fraud committed by both male and females.
These shifts in buying patterns are likely a reflection of the broader changes happening across the gender landscape. And when it comes to blurring gender lines, the fashion market in particular is responding to the notion held by a growing number of consumers that gender is complex and non-binary. As our data reveals, online shopping is in many ways helping to facilitate this: customers are not only able to readily engage in gender neutral shopping, but can do so anonymously if they prefer.