Table of Contents

Introduction

The outlook for online electronics sales is bright, with global sales set to surpass $300 billion in 2018, a 10.7% increase over 2017. The US and Europe are anticipating healthy growth as customers (particularly millennials) become more comfortable making larger purchases online: Best Buy’s 2017 Q4 revenue from online sales in the US was up 17.9% over the previous year. But the largest contributor to this surge will be China, where the enormous population is rapidly adapting to shopping online.

However, taking advantage of this growth in sales is not a given, and electronics retailers will have to adapt to satisfy online shoppers’ rapidly evolving tastes.

Expectations of customer service, especially with respect to fulfillment and shipping times, are being dictated by Amazon. This puts pressure on smaller players to at least match, if not surpass, their level of customer experience in order to maintain market share and customer loyalty. To keep pace, electronics merchants will also have to aggressively pursue growth opportunities by expanding into new geographical regions and offering customers non-traditional ways to shop. Introduction

Finally, electronics merchants will need to efficiently address the threat of fraud in their online orders. It’s not unusual for a general electronics merchant to encounter a 4-5% fraud rate, and Riskified has found that orders for some products–like laptops, tablets and smartwatches–can experience fraud rates in the double digits. Later in the report, we’ll give tips on conducting product-specific analysis, to help merchants protect themselves.

While accurate fraud detection can go a long way toward boosting margins and offering competitive pricing, these are hardly the only benefits to improving the fraud review process. Streamlining fraud operations is also critical to addressing the other key challenges in the market: it makes international markets more accessible, facilitates product launches (when fraud rates tend to be abnormally high), and streamlines order fulfillment.

This report provides an overview of the state of the electronics eCommerce market, explains how fraud exacerbates the challenges faced by electronics retailers, and shows how addressing fraud can be key to scaling operations, expanding internationally, and competing against industry giants.