TECHNOLOGY

Online retail card fraud drops during Black Friday weekend

BY Deena M. Amato-McCoy

Online retailers — and consumers — have something new to be thankful for this holiday season: a decrease in online fraud.

For the first time in recent years, credit card fraud — which remains the highest fraud type for online retailers — has dropped to 42% of total fraud during the holiday weekend (Nov. 24 – 27, 2017). This level was 59% of total fraud for the same period in 2016, according to data from device intelligence for authentication and fraud prevention provider Iovation.

Overall, this decrease demonstrates that online retailers are making strides in their ability to identify and prevent card-not-present (CNP) fraud which has been on the rise since brick-and-mortar retailers have increased their adoption of EMV card technologies, the study reported.

Consumers are doing more of their holiday shopping online in general, a practice that has contributed to a decline in transactions occurring solely on Black Friday and Cyber Monday. This is the result of a shift in sales strategies among online retailers that are now extending promotional deals beyond the holiday shopping weekend.

According to data, 62% of consumer’s online retail transactions from Black Friday to Cyber Monday originated from mobile phones/tablets, compared to 55% last year, confirming the trend that m-commerce during the holidays is increasing year-over-year.

“Online retailers who leverage device intelligence are making significant inroads when it comes to proactively preventing card-not-present fraud,” said Greg Pierson, CEO and co-founder for iovation. “This type of fraud not only cuts into their bottom line results, it can cause irreparable harm to their brand so this is a meaningful improvement.”

In a separate survey of more than 1,000 consumers across four generations, 83% percent of respondents seem to understand how to protect themselves online. They are using a credit card rather than a debit card for online purchases, monitoring credit scores regularly and shopping at well-known retailers. Yet, consumers across all demographic groups continue to exercise poor password hygiene.

While currently serving as consumers’ primary means of authentication, passwords frequently fail when it comes to both user experience and security. Despite these shortcomings, vulnerable passwords are firmly ensconced in today’s online experience.

Of those surveyed, 60% of consumers said they are not changing their passwords regularly (less than every six-to-12 months). Worse, close to 70% use the same password across multiple sites, meaning that a hacker can easily take over multiple consumer accounts with just a single compromised credential, the study said.

A shift from static, password-based authentication to frictionless, multi-factor authentication is crucial to combat today’s escalating threat environment. Multi-factor authentication combines the best of user experience and heightened security for businesses.

Using context to determine how trustworthy the user is ensures the appropriate level of authentication is required. Thus, dynamic authentication makes the right things easy and the wrong things more difficult, providing additional or less layers of authentication when needed, the study said.

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TECHNOLOGY

Online retailer jumps into conversational commerce—just in time for the holidays

BY Deena M. Amato-McCoy

eBay’s new service is making it easier for holiday shoppers to search for merchandise and deals.

Through a new partnership with Google, eBay now lets customers use Google Assistant to shop on its marketplace. Called the eBay Shopping Assistant, the tool enables customers to use their Google Home devices to shop and place orders.

Here’s how it works: Customers initiate their shopping trip by saying, “Ask eBay…”. From here, shoppers can explore available merchandise, ask about deals, as well as find out the value of personal items they may want to sell on eBay, according to eBay’s blog.

The shopping assistant pairs natural language with artificial intelligence (AI). When paired with the science of understanding language, deep learning and predictive modeling, “we can begin to harness the power of human intent, enabling us to create a radically better and more personalized shopping experience for everyone,” Jay Vasudevan, lead product manager, eBay, said in the blog.

As customers continue to use — and share more information about their preferences — with the eBay Shopping Assistant, their experiences will become more tailored.

“Using AI, we are able to create a truly personalized shopping experience inspired by the service you’d expect in a traditional retail setting,” Vasudevan said in the blog.

“By combining eBay’s breadth of inventory and unique selection, the eBay Shopping Assistant can create a shopping experience for virtually everyone,” he added. “This is the inspiration behind some of the exciting work we are doing at the intersection of artificial intelligence, cloud computing, and a new commerce service that’s available wherever shoppers are.”

While eBay is just dipping its toe in the conversational commerce waters, the retailer is already evaluating how to expand the service. For example, eBay is already taking advantage of the device’s multi-surface switching capability, an option that lets users carry a voice conversation on Google Home over to their smartphone, seamlessly.

The e-retailer is among the first companies to take advantage of the multi-surface switching capability, according to the blog.

The shopping assistant is only one AI program that eBay is introducing this holiday season. The online marketplace also launched a new website that organizes and curates merchandise by category.

The service, called “Grouped Listings,” condenses listings by product, not seller. It also tags items through a combination of technology and human input, a move that enables the company to categorize items by theme, as well as similarity.

The AI-based site will also help eBay more accurately monitor what shoppers are buying, instead of directly asking them for their preferences.

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Study: Amazon on track to grab half of e-commerce holiday sales

BY Deena M. Amato-McCoy

It’s shaping up as a record Christmas for Amazon — and it has its Prime members to thank.

The online giant is on pace to comprise roughly half of all e-commerce holiday sales made in the United States this year, according to GBH Insights. This is a large piece of the pie with overall e-commerce growth rising roughly 20% year-over-year each holiday season.

According to Daniel Ives, head of technology research at GBH, Prime members are considered the “golden jewel” of the Amazon empire. This group is an estimated 85 million members strong — and their spending power is on the rise.

Prime members, a group that is increasing significantly (~40%) year-over-year, are also expected to spend between 20% and 25% more this holiday season than a year ago, the study revealed.

“The ring-fence that Amazon has built around its Prime customer base has significantly benefited the company in a fiercely competitive Cyber Monday pricing environment with much more competitive prices from Walmart in particular, seen across inventory during the day,” Ives said. “With e-commerce Black Friday/Cyber Monday sales so far trending above expectations, these are very positive data points heading into the rest of holiday season for Amazon (and its investors), in particular.”

Prime members contributed to a blockbuster Cyber Monday for the online giant. Sales were so big that Cyber Monday became the company’s single biggest shopping day — unseating the e-retailer’s Prime Day shopping event this summer.

Customers ordered “hundreds of millions of products” on Amazon from Thanksgiving through Cyber Monday. Amazon App orders on Cyber Monday increased more than 50% worldwide year-over-year.

The online giant is citing Cyber Monday 2017 as its single biggest shopping day in the company’s history, surpassing Prime Day 2017, which generated approximately $1 billion in revenue, according to initial estimates from analysts at Cowen & Co. and JPMorgan Chase & Co. (Some estimates put the total even higher.)

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