Hot Topic revamps online order approval

Dan Berthiaume
Senior Editor, Technology
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Hot Topic
Hot Topic is automating online fraud review.

Hot Topic Inc. is responding to rapid e-commerce growth by bolstering its authentication process for online orders.

The specialty mall retailer of officially licensed entertainment and music merchandise has seen a sharp increase in digital sales in recent years across both its Hot Topic and Box Lunch banners. However, Hot Topic found this growth also burdened its manual fraud review process and resulted in many legitimate orders being mistakenly rejected.

To rectify this situation, Hot Topic decided to replace its manual rules-based assessment process with the Signifyd Commerce Protection Platform, which is based on data collected from the Signifyd Commerce Network data of more than 10,000 global retailers.

Nearly all online purchases made on the Hot Topic and Box Lunch e-commerce sites are made by consumers previously seen across Signifyd’s Commerce Network. This enables Hot Topic to instantly recognize new customers as legitimate, rather than turning them away. In addition, Signifyd’s machine learning models provide full order automation, while Hot Topic’s previous manual review process took up to 24 hours to process orders.

Since implementing the Signfiyd solution, Hot Topic has seen online purchase approval rates rise to over 99% while 94% of previously declined orders were subsequently approved. After accurately separating fraudulent orders from legitimate ones, Hot Topic obtained millions of dollars in found revenue and improved its overall customer experience, aiding efforts at building loyalty.

Hot Topic also recently began upgrading its capability to meet growing online demand in its supply chain by migrating the warehouse management system (WMS) used at its two fulfillment centers to the cloud-based Manhattan Associates Manhattan Active Warehouse Management platform.

Hot Topic intends to upgrade warehouse management activities such as order streaming, warehouse execution system (WES) functionality, and picking and packing. Manhattan’s WES functionality simplifies and streamlines the process of adding and managing warehouse robots and automation, enabling the WMS to manage workflow of both humans and machines in order to fully optimize the flow of products. 

“The more customer loyalty you earn, the greater fanbase you build,” said Hot Topic and BoxLunch CEO Steve Vranes. “But while we needed to automate order fulfillment for our customers to stay competitive, we couldn’t process the volume of online orders we were receiving while also feeling confident that we were filtering out fraud. So instead, we had to increase manual review before approving orders and that significantly delayed orders for loyal customers. We have invested in the best technology to transform every step of our customer experience.”

“With our Commerce Network, we’re able to solve the data gap for customers like Hot Topic,” said Signifyd CEO Raj Ramanand. “Merchants often become the victims of false declines since manual reviewers lack instant insight into a comprehensive shopping history that is the key to understanding the identity and intent behind the order. That’s where Signifyd can help and our 100% financial guarantee against chargebacks on approved orders also removes any liability from the equation. It’s a win all around.”