Brands attempting quick pivots to digital have spent months learning by trial and error only to find out that offering something new to consumers is often more complex than in looks from the outset.
Drive-thru popularity has spiked during the pandemic because restaurant dining rooms have often been shut down, and drive-thru lanes offer easy paths for low-contact, quick delivery of orders. In fact, the latest PYMNTS Mobile Order-Ahead Tracker found that they’ve been the pandemic’s MVP.
Dhawan said that’s all well and good but for the fact that the more consumers who decide to use drive-thrus, the less able restaurants are to deliver a drive-thru’s speedy service advantage.
“When mass adoption happens, what becomes really apparent is space is limited,” he said. “It suddenly takes a lot longer to go through, and suddenly the speed advantage is lost.”
Dhawan said mobile order-ahead capability offers a good solution, but even that opens up new logistical issues for quick-service restaurants (QSRs). For example, when consumers order ahead from McDonald’s and pick up their meals 30 minutes later, they don’t want food that’s been getting cold for the last 25 minutes because the restaurant fills orders as soon as they come in.
That’s just one challenge of many that merchants face in the pandemic era. From unveiling new capabilities to back-end management to security, the world of digitized consumer interactions requires not just adding features, but optimizing them — and making sure they’re securely, smoothly presented to consumers.
Brave New Holiday Shopping World
That’s more important than ever because Kount’s receipt data shows that the holiday shopping season has already arrived, Dhawan said. It’s a season that presents a host of exciting opportunities for merchants to capture the exploding wave of digital spend, but also one that presents a series of challenges in doing things right and keeping them safe.
With so many consumers switching online for their commerce needs this year, there are things we can simply know will be the “sunk costs” of additional business during the season, Dhawan said.
For instance, he said, chargeback attempts are going to climb with transaction volume. That will sometimes come as a result of criminal fraud, but also as a result of friendly fraud, with consumers not always being able to fully suss out what they’re buying when they can’t see it in person.
Dhawan said that as passionate as Kount is about stopping chargebacks, the company knows there are merchants new to eCommerce this year, and many are facing transaction volumes at an all-time high, making chargebacks that much more of a risk this year. Therefore, the goal will be “successfully managing fraud and preventing chargeback[s] in this environment such that merchants keep a higher percentage of sales online,” he said.
But Dhawan added that merchants must do so “without slow and costly manual reviews that slow down operations — or worse, produce false positives that turn away good customers.”
Rule No. 1: Don’t Increase Friction
He said adding friction to the sales process is no solution. The customer’s digital experience needs to be smooth and seamless; adding roadblocks will turn away good customers who don’t want to be bothered with a lot of hurdles.
Dhawan said speed and convenience are the elements of an eCommerce journey that attracts customers. Friction at any point — whether due to manipulated inventory, slow shipping, manual reviews or complex authentication tools — runs the odds of driving customers to the competition.
He said smart merchants realize they can’t just opt out of providing a good customer experience. The responsibility to provide smooth, seamless journeys remains even if “you are exploring this channel at this capacity [and] this scale for the first time,” Dhawan said.
Customer expectations aren’t going to diminish, which is why merchants who want to stay competitive need to dig deep into their data and potentially find partners that will help them leverage artificial intelligence (AI) to address the challenges, of which there will be many.
What Merchants Need To Look Out For
Dhawan said the problem with trying to list the threats merchants will likely face this holiday season is that there are lots of them — some easier to foresee than others.
Malicious bots that take over consumer accounts, shut down websites and infiltrate servers to scrape data aren’t easy threats to deal with, but at least they’re known ones. But Dhawan said these “bot armies” aren’t the only negative bot activity merchants will need to look for this year.
For instance, he said he expects armies of “buyer bots” to be out, descending on product pages and attempting to snap up desirable items within seconds before real customers can get in. These bots will carry off goods for resale at more expensive sales locales.
Dhawan said Kount is used to seeing buyer bots snap up popular concert or sports tickets, “but this year, we [know it’s starting to happen] with toys and games and other popular holiday items. Honestly, it’s kind of crazy the range of things bots will go after.”
That’s why the firm believes event-based bot detection can be critical this season. Merchants should also be on the lookout for thieves going after digital gift cards by hacking accounts and draining them before their rightful recipients can use them. Dhawan said fraudsters are also discovering a new love of buy online, pick up in store.
After all, he said that when card thieves order online, they have to wait two days or so for delivery like anyone else — a period in which the fraud might be discovered. But if they order online and pick up in store, the goods are in their hands and ready for resale within a few hours.
Fraudsters Love Merchants’ New Online Features
In fact, fraudsters will appreciate whatever merchants offer legitimate customers to create smoother, stickier shopping experiences because that will create smoother, simpler processes for stealing, Dhawan said. That’s where AI-driven fraud prevention can come in. Making trust or risk decisions in milliseconds — all invisible to shoppers — could be crucial to scaling and thriving this season. For the merchants who face this volume of eCommerce for the first time, the challenges make for a steep learning curve.
“This is a crazy time to learn something,” Dhawan said. “There is going to be exposure there for the merchants who are just dipping their toes into the direct-to-consumer and digital channels.”
But learn they will have to because given the shape of the 2020 holiday shopping season, they don’t have much choice.