Conquering Fear Opens Up the World For Retailers

Eliminating fear from customer transactions expands the possibilities for retailers in so many ways, Indy Guha, Signifyd vice president for growth marketing, told a crowd of industry professionals at the NRF Big Show on Monday.

For instance, it opens up the world — literally — when retailers can expand into new markets without worrying about their lack of transaction history with their new consumers. It means retailers don’t risk insulting their customers by withholding legitimate orders based on the suspicion that the orders are fraudulent. It eliminates a huge distraction from running a retail business and from focusing on serving customers’ ever-changing expectations.

And while the new possibilities are great for retail businesses — Guha referred to them as “shields from oblivion” — it turns out they are also good for retailers’ customers. In an era when customer experience is the differentiator, the importance of finding ways to make those experiences better cannot be overstated.

Fear leads to friction in the customer experience

“That is the heart of this talk, fear vs. opportunity,” Guha said during a presentation called “Striking Balance Between Fear, Risk and Customer Love to Unlock Omnichannel Growth.” “The challenge for us is that with fear comes friction. The consumer doesn’t understand your fear. They don’t care what you’re worried about.”

But consumers do understand friction. In fact, Guha said 37 percent of shopping carts that are abandoned are abandoned because of account requirements placed on consumers. Nearly 50 percent of shoppers expressed frustration at being redirected for security reasons, he said.

And such bad experiences have big implications. Fifty percent of those surveyed by American Express decided against a purchase because of a bad experience. A Signifyd survey conducted by polling firm Survata found that 53 percent of consumers stopped doing business with a retailer because of one or two bad experiences.

And when a retailer incorrectly declines a customer’s order for fear of fraud? The same survey found that 36 percent will never shop with that retailer again.

The path to eliminating that fear has been blazed by digitally native retailers. These upstart retailers often start online, selling directly to consumers. They focus on what differentiates them in the market. They build compelling products and stories to go with them. They partner with retail technology providers to handle the operations that are not at the core of their mission.

Operations such as customer acquisition, customer support, fulfillment, payment, fraud protection and more can be parceled out to trusted and accountable partners, while the ecommerce business focuses on delighting customers.

With fraud prevention, which is Guha’s area of expertise, finding a technology company that offers guaranteed fraud protection, changes the way an organization has to think about fraud. The guaranteed fraud protection model uses big data, machine learning and domain expertise to make a ship-or-don’t-ship decision in milliseconds in the vast majority of cases.

Furthermore, if a guaranteed fraud provider approves an order that later turns out to be fraudulent, it makes the merchant whole for all the costs involved. That allows merchants to ship orders that might have seemed risky on the surface, but not once the guarantee model’s machine learning system examines a multitude of signals that separate the good from the bad.

Knowing your customer first leads to good things

The intelligence and the protection allows retailers to “lean into the opportunity,” Guha says, rather than being paralyzed by the fear. It’s a “knowing-your-customer-first approach,” he says, which in Signifyd’s case is made possible because the company sees transaction data across its 10,000 customers in more than 100 countries.

By knowing their customers, merchants can open up new international markets with confidence, which is a very good thing, Guha said.

“It’s probably the fastest growing tailwind in ecommerce,” he said of international sales.

Cross-border commerce, he added, will grow at 17 percent annually, according to analysts, while ecommerce overall will expand by 12 percent. China, alone, provides a monumental opportunity, Guha noted, a point made earlier in the day by J. Michael Evans, president of Alibaba Group.

Knowing customers means retailers can provide-buy-online-pick-up-in-store, without worrying about the relative lack of customer data necessary for the transaction compared to a traditional online order.

Most importantly, knowing customers allows retailers to treat their customers the way they have always wanted to — as much appreciated fans who deserve experiences that are memorable and worthwhile.

Photo by Mike Cassidy

Mike Cassidy

Mike is lead storyteller at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at mike.cassidy@signifyd.com; follow him on Twitter at @mikecassidy.

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