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Building a company’s tech stack on MACH principles will enhance the e-commerce experience and set companies up for success.
MACH — an acronym for Microservices, API-first, Cloud-native SaaS, and Headless architecture — is a fundamental concept for modern organizations’ digital strategy. With it, every component is pluggable, scalable, replaceable, and can be continuously improved through agile development.
It is designed for seamless integration, so these modular solutions let businesses detach from legacy tools and freely choose the best-in-class technologies available. This composable, swappable architecture empowers companies to continuously evolve their digital ecosystems, piece by piece, without the need for disruptive, risky, and costly re-platforming projects.
According to the MACH Alliance, a MACH approach enables businesses to stay agile and responsive within the fast-paced digital landscape. It not only provides the technical flexibility modern brands need to innovate but also cultivates an organizational culture that values experimentation.
MACH began as a way to define technical architecture. It now enables organizations to transform their technology to future-proof their business, align their mindset and organizational culture, and further outpace competitors in an already digitally accelerated world, offered Casper Rasmussen, president of the MACH Alliance.
“MACH is designed to promote a business-first mindset. It offers adaptability, scalability, and agility, as this approach effectively ‘composes’ a digital ecosystem from small independent services that can be developed, deployed, and scaled individually, with a focus on realizing business outcomes,” he told the E-Commerce Times.
Rasmussen noted that MACH’s architecture differs from other technology stacks. It relies on an architecture mindset where all components are tightly integrated.
“This inflexibility challenges adaptation, scaling, connection, and optimization of the digital experience,” he cautioned.
In addition, organizations often need to limit their ambition and digital strategies to match the functions and limitations of a cumbersome, standardized technology mindset. Instead, technology has to be a core strategic asset of the business, a key differentiator and enabler.
“If not, technology forces the business and brand to join the race to parity,” said Rasmussen.
We asked Rasmussen to help us understand more of MACH’s intricacies. He offered three primary benefits of adopting its principles.
To further understand how MACH principles deliver measurable value, we asked Rasmussen to share his insights on their real-world impact and potential to address future challenges.
Casper Rasmussen: In the MACH Alliance 2024 Global Annual Research report, we observed that MACH adoption saw stable growth despite economic volatility. This is further evidenced by 85% of the respondents achieving ROI on their MACH investment.
MACH enables an incremental approach that prioritizes outcomes over output. This mindset impacts how businesses quantify cost and investment in MACH, which thereby has to consider opportunity cost, efficiency gains in digital execution and activation, and technology investments.
Rasmussen: MACH and composable approaches are business critical for modern e-commerce organizations to ensure they have the flexibility to innovate rapidly. The technology allows them to respond to market changes and customer demands while internally harnessing operational agility and efficiency.
Rasmussen: The benefits of MACH and a composable approach extend far beyond e-commerce and retail. We see a wide range of successful use cases across diverse industries, including financial services, manufacturing, healthcare, travel and tourism, and high-tech. We have several case studies from brands such as Volkswagen in automotive, Unobravo in health care, Pllay in entertainment, and easyJet in travel and tourism.
These companies are looking to innovate, enhance customer experiences, and stay competitive in the digital landscape. The MACH stack’s modular, flexible, and integrated approach makes it an appealing choice for businesses across diverse industries.
The growing adoption of the MACH stack across various sectors signals a strong market shift towards more agile and responsive systems that can accommodate a wide range of business needs and use cases.
Rasmussen: MACH’s initial use cases were limited to e-commerce and retail, but through the launch of our Industry Advisory Board earlier this year, the Alliance was able to leverage the experience and insights of knowledgeable industry leaders to develop the best path for expansion to wider industries and geographic markets.
This ongoing effort to broaden the MACH market and diversify the Alliance’s focus has attracted several new member organizations outside of e-commerce. One such member is J.P. Morgan.
Rasmussen: In July 2024, the Alliance established a Community Council of volunteers from its member organizations to champion collaboration, innovation, and diversity. It will work to expand the organization’s membership and diversify it by forging alliances with industry associations, technology vendors, and consultancies.
Looking ahead to 2025, we want to expand Alliance membership into new and adjacent technology categories. The focus remains on ensuring MACH-certified vendors uphold our core criteria and commitment to the market.
In January, we will release our 5th Global Annual Research Report that speaks to over 500 brands across North America, the U.K./Europe, and APAC to better understand the evolving landscape of technology infrastructures. It looks at key topics and challenges for these leading brands to help understand the trends and insights related to adopting a MACH/Composable approach and achieving competitive advantages.
All this comes together at The Composable Conference by the MACH Alliance in Chicago in April 2025. This conference will provide tailored insights for attendees at any stage of their MACH journey.
The future of cross-border e-commerce hinges on local, on-demand production to meet evolving demands from lawmakers, regulators, consumers, and businesses. This approach aims to alleviate supply chain stress while advancing sustainability efforts.
Supply chains remain fragile, facing persistent challenges like global conflict, trade barriers, and extreme weather. These disruptions, coupled with delays in critical transportation routes, are stalling the international marketplace, according to Henrik Müller-Hansen, CEO of print-on-demand software company Gelato.
Müller-Hansen has a plan to solve those issues, enable more cross-border sales expansion, and help locales ease their aggressive CO2 levels. Shifting to local and on-demand production and delivery services reduces this stress and fosters collaboration among businesses that need one another to succeed, he suggested.
“Supply chain disruptions have become increasingly complicated since the pandemic, with extreme weather and global conflict bottlenecking the Red Sea and Panama Canal, among other crucial transportation avenues that heavily impact international shipping — hurdles that won’t be solved overnight,” he told The E-Commerce Times.
HTwenty, an early-stage venture firm investing in pre-seed, seed, and series A tech companies across Latin America and the U.S. Hispanic population, is tackling cross-border e-commerce growth from a different angle, by capitalizing on the rapid expansion of the Latin American market.
According to Daniel Lloreda, co-founder of HTwenty, countries like Mexico and Colombia are experiencing significant online sales growth—24% and 12%, respectively—driven not only by rising numbers but by the simultaneous evolution of native products, infrastructure, and services in the region.
Gelato enables creators to produce personalized products locally, offering a practical solution for navigating supply chain inefficiencies. Since rebranding from OptimalPrint in 2007, the company has built a global network of more than 140 partners across 32 countries, reaching five billion consumers. This infrastructure gives makers a strategic advantage by reducing logistical hurdles and inventory challenges.
“We’ve built relationships with a global community of print producers who have shared their insights on the industry’s evolution, which has been key to Gelato’s growth. Over time, we recognized the opportunity to leverage this network to benefit creators and makers,” Müller-Hansen shared.
By reducing reliance on centralized mass production, Gelato’s model empowers local production shops to meet e-commerce demands and reduces emissions, contributing to sustainability. This approach helps makers avoid supply chain disruptions while addressing key environmental concerns.
One element the shipping industry can control is managing its supply chains to increase resilience and long-term sustainability. Getting to the root of these collective hurdles will require fresh systems to move away from forecasting models and engage local production hubs, Müller-Hansen explained.
“For creators and e-commerce businesses looking to reach global customers, working with a company like Gelato eases these challenges with a commitment to local suppliers,” he offered.
The software company side of Gelato puts production companies through a rigorous certification process to become a network partner. Once they are approved, they become part of the global ecosystem.
The network provides makers and other e-commerce businesses with a more sustainable way to manufacture and distribute products. Gelato’s software, which connects the largest network of on-demand production hubs, allows products to be locally and efficiently produced where and when needed, reducing waste, errors, transportation times, and carbon emissions.
“On top of that, it moves makers away from a forecasting model and centralized mass production to the on-demand model. If we produce goods only when ordered, that is another step in the right direction for the planet,” Müller-Hansen said.
Consumers worldwide are reshaping traditional production methods. Their preferences and choices have become the most significant force driving change, ultimately determining the direction of entire industries.
Who does not want local production of personalized products, he quipped. His network of production partners empowers the creator economy to go global. Orders from an e-commerce company are routed to the production facility closest to the end consumer.
With Gelato, 99% of products are produced and delivered within the same region as the end customer, and 87% are within the same country. Additionally, Gelato is the largest on-demand network in the world, according to the company’s founder.
“With an on-demand model, a product is only made when it is sold, perfectly matching supply with demand and negating the need for mass production,” he observed.
Take the printing needs as an example; according to Müller-Hansen, the average print run has been reduced from more than 3,000 items per print to fewer than 30 in the last two decades. This reduction pressured print producers to fulfill individual requests while remaining profitable.
“With local, on-demand production, we equip entrepreneurs and business owners with the tools they need to compete with companies 100 times their size,” he said. “Gelato print producers can quickly access economies of scale and streamline operations, allowing software to organize tasks and improve efficiency, quality, and profitability.”
The Gelato network applies that same approach to other production needs, he continued. Gelato makes it possible for makers to sell their products and deliver them faster with fewer emissions. With Gelato’s purpose-built print production software, millions of highly personalized items across about 50 product categories have been delivered to customers worldwide for over 15 years.
“We’ve reduced costs for our print production partners across procurement and logistics,” Müller-Hansen said.
GelatoConnect supports machine types for procurement, workflow, and logistics modules, adding efficiency to the entire process. Workflow automates prepress and reduces raw material costs and stock needs.
It ensures that jobs are followed through every step of their production journey. Logistics offers access to a wider array of local and international carriers, with the right package (size, location) being matched automatically to the right method, he explained.
“Finally, procurement will take your supply chain and stock management to a new level. Aggregated buying is just smarter. And with this, we’re lowering the barrier to entry for creators and entrepreneurs everywhere by giving them the production costs and delivery speed of large e-commerce sellers without the same upfront investment,” Müller-Hansen asserted.
A sophisticated mobile phishing campaign targeting job seekers intended to install dangerous malicious software on their phones was revealed Tuesday by security researchers.
The campaign discovered by Zimperium zLabs targets Android mobile phones and aims to distribute a variant of the Antidot banking trojan that the researchers have dubbed AppLite Banker.
“The AppLite banking trojan’s ability to steal credentials from critical applications like banking and cryptocurrency makes this scam highly dangerous,” said Jason Soroko, a senior fellow at Sectigo, a certificate lifecycle management provider in Scottsdale, Ariz.
“As mobile phishing continues to rise, it’s crucial for individuals to remain vigilant about unsolicited job offers and always verify the legitimacy of links before clicking,” he told TechNewsWorld.
“The AppLite banking trojan requires permissions through the phone’s accessibility features,” added James McQuiggan, a security awareness advocate at KnowBe4, a security awareness training provider in Clearwater, Fla.
“If the user is unaware,” he told TechNewsWorld, “they can allow full control over their device, making personal data, GPS location, and other information available for the cybercriminals.”
In a blog on Zimperium’s website, researcher Vishnu Pratapagiri explained that attackers present themselves as recruiters, luring unsuspecting victims with job offers. As part of their fraudulent hiring process, he continued, the phishing campaign tricks victims into downloading a malicious application that acts as a dropper, eventually installing AppLite.
“The attackers behind this phishing campaign demonstrated a remarkable level of adaptability, leveraging diverse and sophisticated social engineering strategies to target their victims,” Pratapagiri wrote.
A key tactic employed by the attackers involves masquerading as a job recruiter or HR representatives from well-known organizations, he continued. Victims are enticed to respond to fraudulent emails, carefully crafted to resemble authentic job offers or requests for additional information.
“People are desperate to get a job, so when they see remote work, good pay, good benefits, they text back,” noted Steve Levy, principal talent advisor with DHI Group, parent company of Dice, a career marketplace for candidates seeking technology-focused roles and employers looking to hire tech talent globally, in Centennial, Colo.
“That starts the snowball rolling,” he told TechNewsWorld. “It’s called pig butchering. Farmers will fatten a pig little by little, so when it’s time to cook it, they’re really big and juicy.”
After the initial communication, Pratapagiri explained that the threat actors direct victims to download a purported CRM Android application. While appearing legitimate, this application functions as a malicious dropper, facilitating the deployment of the primary payload onto the victim’s device.
Illustration of one of the methods employed to distribute and execute the AppLite malware on the victim’s mobile device. (Credit: Zimperium)
Stephen Kowski, field CTO at SlashNext, a computer and network security company in Pleasanton, Calif., noted that the AppLite campaign represents a sophisticated evolution of techniques first seen in Operation Dream Job, a global campaign run in 2023 by the infamous North Korean Lazarus group.
While the original Operation Dream Job used LinkedIn messages and malicious attachments to target job seekers in the defense and aerospace sectors, today’s attacks have expanded to exploit mobile vulnerabilities through fraudulent job application pages and banking trojans, he explained.
“The dramatic shift to mobile-first attacks is evidenced by the fact that 82% of phishing sites now specifically target mobile devices, with 76% using HTTPS to appear legitimate,” he told TechNewsWorld.
“The threat actors have refined their social engineering tactics, moving beyond simple document-based malware to deploy sophisticated mobile banking trojans that can steal credentials and compromise personal data, demonstrating how these campaigns continue to evolve and adapt to exploit new attack surfaces,” Kowski explained.
“Our internal data shows that users are four times more likely to click on malicious emails when using mobile devices compared to desktops,” added Mika Aalto, co-founder and CEO of Hoxhunt, a provider of enterprise security awareness solutions in Helsinki.
“What’s even more concerning is that mobile users tend to click on these malicious emails at an even larger rate during the late night hours or very early in the morning, which suggests that people are more vulnerable to attacks on mobile when their defenses are down,” he told TechNewsWorld. “Attackers are clearly aware of this and are continually evolving their tactics to exploit these vulnerabilities.”
This new wave of cyber scams underscores the evolving tactics used by cybercriminals to exploit job seekers who are motivated to make a prospective employer happy, observed Soroko.
“By capitalizing on individuals’ trust in legitimate-looking job offers, attackers can infect mobile devices with sophisticated malware that targets financial data,” he said. “The use of Android devices, in particular, highlights the growing trend of mobile-specific phishing campaigns.”
“Be careful what you sideload on an Android device,” he cautioned.
DHI’s Levy noted that attacks on job seekers aren’t limited to mobile phones. “I don’t think this is simply relegated to mobile phones,” he said. “We’re seeing this on all the social platforms. We’re seeing this on LinkedIn, Facebook, TikTok, and Instagram.”
“Not only are these scams common, they’re very insidious,” he declared. “They prey on the emotional situation of job seekers.”
“I probably get three to four of these text inquiries a week,” he continued. “They all go into my junk folder automatically. These are the new versions of the Nigerian prince emails that ask you to send them $1,000, and they’ll give you $10 million back.”
Beyond its ability to mimic enterprise companies, AppLite can also masquerade as Chrome and TikTok apps, demonstrating a wide range of target vectors, including full device takeover and application access.
“The level of access provided [to] the attackers could also include corporate credentials, application, and data if the device was used by the user for remote work or access for their existing employer,” Pratapagiri wrote.
“As mobile devices have become essential to business operations, securing them is crucial, especially to protect against the large variety of different types of phishing attacks, including these sophisticated mobile-targeted phishing attempts,” said Patrick Tiquet, vice president for security and architecture of Keeper Security, a password management and online storage company, in Chicago.
“Organizations should implement robust mobile device management policies, ensuring that both corporate-issued and BYOD devices comply with security standards,” he told TechNewsWorld. “Regular updates to both devices and security software will ensure that vulnerabilities are promptly patched, safeguarding against known threats that target mobile users.”
Aalto also recommended the adoption of human risk management (HRM) platforms to tackle the growing sophistication of mobile phishing attacks.
“When a new attack is reported by an employee, the HRM platform learns to automatically find future similar attacks,” he said. “By integrating HRM, organizations can create a more resilient security culture where users become active defenders against mobile phishing and smishing attacks.”
Cyberattacks on consumers and retailers surged during Black Friday week, according to a report released Wednesday by a cybersecurity platform provider.
The provider, Darktrace, of Cambridge, England, reported that an analysis of its customer data for November revealed a 327% increase in worldwide Christmas-themed phishing from the first week to the last week of the month and a 692% increase in Black Friday-themed sorties.
The threat landscape in the United States was considerably worse, the report noted, with phishing attacks mimicking major holiday brands, including Walmart, Target, and Best Buy, rising by more than 2000% during peak shopping periods.
Darktrace researchers also found that scammers began shifting their attention from businesses to consumers as the holiday shopping season got into high gear. The impersonation of major consumer brands grew 92% globally between the analyzed periods while mimicking workplace-focused brands declined by 9%.
“While we didn’t look at a year-on-year comparison in this analysis, we believe the rise of AI combined with automation and growing cybercrime-as-a-service marketplaces is increasing the speed, scale, and sophistication of cyberattacks, including phishing,” Darktrace Vice President of Threat Research Nathaniel Jones told the E-Commerce Times.
“With generative AI, the barrier to entry of phishing and malware has been lowered, creating a lot more danger for users as they do their holiday shopping,” Jeff Wolverton, CEO of PiviT Strategy, an IT consulting and managed services provider, in Charlotte, N.C., told the E-Commerce Times.
Jones added that one sophisticated technique that has been increasing in prominence is thread hijacking. “Thread hijacking typically involves attackers gaining access to a user’s email account, monitoring ongoing conversations, and then inserting themselves into these threads,” he explained.
“By replying to existing emails, they can send malicious links, request sensitive information, or manipulate the conversation to achieve their goals, such as redirecting payments or stealing credentials,” he continued. “Because such emails appear to come from a trusted source, they often bypass human security teams and traditional security filters.”
“This year, it appears that the quantity of fake online stores has increased,” added Erich Kron, security awareness advocate at KnowBe4, a security awareness training provider in Clearwater, Fla. “This is likely due to improvements in tools and the use of AI to generate fake sites, create item descriptions, and write fake reviews in an effort to make the sites seem legitimate.”
He explained that by using freely available tools, bad actors can easily and quickly mimic an entire website, including images, logos, and other identifying features. “It’s then relatively easy to create a domain name that appears to be that of the legitimate brand or an affiliate of the brand they are copying,” he told the E-Commerce Times.
“Even though these websites are typically taken offline very quickly, the ease with which they can be created counters the disadvantage of them being shut down quickly,” he said.
Mika Aalto, co-founder and CEO of Hoxhunt, a provider of enterprise security awareness solutions in Helsinki, explained that holidays contain more travel and gift-buying activity along with heightened emotions, so there are a lot more psychological buttons available to hackers during this season of giving.
“Package delivery-themed phishing campaigns are common, and we see a number of Amazon spoofed sites that lead to credential harvesters,” he told the E-Commerce Times. “Travel-themed phishing campaigns might notify a victim that their flight has been canceled, so in a panic, someone might click something they otherwise wouldn’t and download malware that could compromise their system.”
Leading up to Black Friday and throughout the holiday season, threat actors like to capitalize on themes like deals or coupons, added Selena Larson, a senior threat researcher at Proofpoint, an enterprise security company in Sunnyvale, Calif.
“We also see threat actors leverage end-of-year themes like bonuses or pay raises to entice users to engage with malicious content,” she told the E-Commerce Times.
Consumers need to be particularly careful when responding to potential deals on their mobile phones. “Make sure that you are on an official site before you perform a transaction,” cautioned Krishna Vishnubhotla, vice president of product strategy at Zimperium, a mobile security company based in Dallas.
“Since mobile devices have a smaller form factor, this will be extremely difficult,” he told the E-Commerce Times. “Bad actors will redirect you over and over again to confuse you and make you land on a fake website. Unfortunately, there is really no way to know where these sites are hosted so that you can make a smart decision based on that information.”
The surge in holiday-themed phishing attacks reflects how cybercriminals expertly time their campaigns to blend in with the heightened volume of legitimate retail communications and capitalize on consumers’ reduced scrutiny during peak shopping periods, observed Stephen Kowski, field CTO with SlashNext, a computer and network security company, in Pleasanton, Calif.
“The massive spike in retail brand impersonation attacks targeting major retailers demonstrates how threat actors are becoming increasingly sophisticated in exploiting seasonal consumer behaviors and shopping patterns,” he told the E-Commerce Times. “Modern phishing threats have evolved beyond traditional corporate email security boundaries, targeting personal accounts, social media, and various communication channels that employees use while shopping online during work hours.”
“Organizations need comprehensive protection that extends beyond corporate infrastructure to detect and block sophisticated phishing attempts across all digital channels while ensuring employees can safely participate in holiday shopping without compromising security,” he said.
Chris Hauk, the consumer privacy champion at Pixel Privacy, a publisher of consumer security and privacy guides, pointed out that brands are making efforts to foil scammers. “Brands are taking action to battle impersonators by verifying their official accounts on social media, having fake apps removed from app stores, and submitting takedown requests for lookalike websites and domains,” he told the E-Commerce Times.
“Brand impersonation is a persistent problem and is difficult to combat,” noted Paul Bischoff, a privacy advocate at Comparitech, a reviews, advice, and information website for consumer security products.
“If a company knows its brand is being used to scam people,” he told the E-Commerce Times, it should do what it can to raise awareness of the scam among its customers. The problem is more pervasive during the holiday season when people are looking to take advantage of shopping deals.”
Unfortunately, consumers aren’t the only shoppers for deals during the holiday season. “Similar to retailers, threat actors also use the holiday season to offer seasonal discounts for their offerings,” Darktrace’s Jones said. “Cybercriminal shops will offer deals on the dark web for compromised data, like usernames and passwords, often selling them in bulk pricing deals during the holiday season.”
Mushrooming fake store sites, deceptive domains, and compromised e-commerce sites are just a few of the threats facing online shoppers and businesses this holiday season, according to reports recently released by two cybersecurity companies.
A report released Tuesday by London-based Netcraft, a cybercrime disruption and digital risk protection company, revealed a 110% increase in fake stores from August to October of this year compared to the same period in 2023.
“We see this every year,” said Netcraft Software Engineering Lead Will Barnes.
“The previous peak in the number of fake store domains was last November,” he told the E-Commerce Times. “We’ve just seen a new peak in October and expect it to be even higher in November. This is generally a high period for this type of crime.”
The surge in fake stores is being powered by the use of large language models by threat actors, according to the report. It explained that LLMs are used to generate long- and short-form text for the product descriptions on these sites.
“We first observed LLM-generated retail product descriptions in July 2024, and similar behaviors continue into the holiday shopping season,” the report noted. “This includes examples of fake stores appropriating product listings directly from Amazon and using LLMs to rewrite the copy for enhanced search engine performance.”
In the past, Barnes explained, scammers would use off-the-shelf e-commerce software to create their stores. Product descriptions on the sites were either empty or ripped off legitimate sites.
“With the use of large language models, what we’re seeing is completely original, convincing looking text, that’s just completely made up, or a rewording of the original listing to make it so that it’s not obviously just ripped,” he said.
The use of LLMs allows threat actors to provide higher quality images of products and brands, as well as enable them to create more compelling sales pitches in email messages, noted Jim Routh, chief trust officer at Saviynt, an identity governance and access management solutions company, in El Segundo, Calif.
“Both of those capabilities enhanced through the use of LLMs is lowering the time it takes to create fraudulent storefronts online while increasing the probability of victims for the cybercriminals,” he told the E-Commerce Times.
“The simplified ability to create websites quickly and with little effort, either through the use of generative AI or even basic scripts, is allowing bad actors to quickly and easily create these stores at a large scale,” added Erich Kron, security awareness advocate for KnowBe4, a security awareness training provider, in Clearwater, Fla.
“The holiday season is a perfect time for bad actors to create these stores while people are caught up in the rush of shopping for loved ones and friends,” he told the E-Commerce Times.
Kimberly Sutherland, vice president of fraud and identity strategy at LexisNexis Risk Solutions, a global data analytics and services company, noted that using URLs that closely resemble a brand’s store to steer shoppers to a fraud site isn’t new. “However, consumers could usually tell when they were on a fraudulent site,” she told the E-Commerce Times. “It didn’t quite work or feel exactly as expected.”
“Now, in all forms of scams, consumers are having difficulty determining if something is inaccurate,” she said. “Fraudsters are using AI tools to improve not just the way that they send an email or a text message with more accurate content, but now they’re also able to use a generative AI tool to create full web pages that look exactly like brand pages.”
A source of tens of thousands of fake stores is an e-commerce tech platform called Shopyy, according to Netcraft. Shopyy, based in China, offers a broad portfolio of technical solutions to help retailers build and optimize online stores, promote their products, and accept different payment types, Netcraft’s report explained. Shopyy also provides hosting and domain registration on behalf of store operators.
“Unfortunately, the customization and convenience that benefits genuine retailers can be misused by cybercriminals,” the report noted. “While some legitimate businesses use Shopyy as their e-commerce platform partner, we’ve detected thousands of Shopyy-powered fake stores, increasing month-over-month since April 2024. Between November 18 to 21 alone, Netcraft’s systems identified more than 9,000 new fake store domains hosted through Shopyy.”
“These sites often impersonate established brands to take advantage of their intellectual property, brand reputation, and existing customer base,” it continued. “Instead of offering the same quality products and services, they trick unsuspecting shoppers into paying for fake, substandard, or non-existent products.”
Fake stores are just part of an evolving attack surface open to online raiders. “The holiday season presents an irresistible opportunity for cybercriminals to capitalize on increased online transactions,” FortiGuard Labs noted in a blog posted Tuesday.
“Tools and services now available on the darknet empower attackers to target e-commerce platforms and unsuspecting shoppers more effectively than ever,” it continued. “This year, threat actors are leveraging cutting-edge techniques, including AI-powered phishing lures, sophisticated website cloning tools, and remote code execution (RCE) exploits to gain unauthorized access to shopping platforms.”
“AI-driven methods allow attackers to craft convincing emails and replicas of legitimate websites to steal data or trick users into disclosing sensitive information,” it added.
In a report released Nov. 15, FortiGuard noted that cybercriminals are using AI models like ChatGPT to craft convincing phishing emails, mimicking legitimate communications from retailers and banks, which increases the effectiveness of their scams, especially during peak shopping periods.
“These phishing attacks can automatically generate customized content, adapt in real time, and learn from successes and failures to improve effectiveness,” said Stephen Kowski, field CTO at SlashNext, a computer and network security company in Pleasanton, Calif.
“Unlike traditional phishing, AI phishing can scale to produce thousands of unique, targeted messages and quickly pivot based on defense,” he told the E-Commerce Times.
The FortiGuard report also noted that threat actors are ramping up efforts to exploit online shopping trends. It warned that thousands of holiday-themed domains mimicking trusted brands like Amazon and Walmart are being registered to deceive consumers with fake offers and promotions.
Popular platforms such as Adobe Commerce, Shopify, and WooCommerce are prime targets due to weak configurations and outdated plugins, it continued. Attackers are deploying sniffers to capture customer data and using RCE exploits to gain administrative access to shopping platforms.
Jason Soroko, a senior fellow at Sectigo, a comprehensive certificate lifecycle management provider in Scottsdale, Ariz., warned businesses and consumers about some potential threats facing them online.
“The Thanksgiving shopping season exposes retailers to ‘algorithm poisoning,’ where attackers manipulate dynamic pricing algorithms,” he told the E-Commerce Times. “By injecting false demand signals or exploiting vulnerabilities at the API level, they could trigger price drops or modify inventory systems, leading to any number of issues. Monitoring APIs for anomalies is a critical countermeasure.”
“Loyalty account harvesting also is a potential, as attackers use credential stuffing to exploit weak passwords, stealing rewards points for resale or fraudulent purchases,” he added. “Many loyalty programs lack multi-factor authentication, making them easy targets. Retailers must enforce MFA, promote strong password practices, and adopt passwordless technologies to safeguard customer accounts.”
Kron noted that the holiday shopping season is often a source of anxiety for a lot of people as they search for gifts. “Black Friday has become synonymous with deep discounts and obscene savings as well as the availability of sought after, but hard to find items, largely due to the early days of this event,” he said.
“Although the deals do not seem to be anywhere near what they used to be, and the fact that retailers are spreading out Black Friday savings across the entire month of November, people still feel the excitement of potentially spotting a great deal,” he continued. “When we are under significant stress in the form of fear or even this type of excitement, we tend to miss details that might otherwise be a strong warning sign to look out for scammers and cybercriminals.”
Paradoxical tensions among consumers are making their behavior unpredictable and baffling many sellers, according to a report released Monday by a global strategy and management consulting firm.
Consumers want choice but are overwhelmed by it; want to control their decisions but want curation of their choices; and want to live certain values but can’t always prioritize them, according to the report by the Kearney Consumer Institute (KCI) based on survey data gathered from 14,000 consumers in the United States, Europe, and Asia Pacific region.
“Brands have more data than ever about consumer demographics, behavior, spending, and opinions. But we still often categorize consumer behavior as ‘unpredictable.’ To understand why, our research found three key consumer tensions that help explain this behavior,” KCI lead Katie Thomas said in a statement. These key tensions include:
The research suggested that retailers and brands aren’t striking the right balance between facts versus feelings, curation versus control, and too many choices. “When retailers and brands balance the tension, applying emotional intelligence and great merchandising, they will better navigate the mindset of the future consumer to address their needs,” Thomas stated.
Choice presents a prime example of the paradoxical behavior cited in the report. Only one in four consumers said they’re overwhelmed by the number of decisions they need to make each day, the report noted, but qualitative research tells another story. Call it decision fatigue, analysis paralysis, or the paradox of choice, but people often start by sharing that they’re exhausted by options.
“Decision fatigue is very real,” Thomas told the E-Commerce Times. “What brands say they’re responding to is their belief that consumers are demanding ever more specialized options, but the reality is that consumers are overwhelmed by a staggering number of choices in the aggregate.”
“How can brands and retailers address this inconsistency?” she asked. “The best way is to gain a firmer grasp of the consumer’s lifestyle and then respond to that. So, it’s a combination of understanding and merchandising. For example, Trader Joe’s does a great job of this by offering fewer choices while matching those to the consumer’s lifestyle.”
“The paradox of choice leads to analysis paralysis among consumers,” added Matthew A. Gilbert, a marketing lecturer at Coastal Carolina University in Conway, S.C.
“When there are too many choices, consumers are often unable to make a choice,” he told the E-Commerce Times. “The solution is to have a limited selection of options, not every possible product permutation.”
The report advised sellers that sometimes it’s best to forgo additional options and look for better ways to innovate and offer choices without adding clutter to the market.
“Adding new products to the market is part of the innovation process. The key for sellers is to offer product choices in sets rather than offer them all at once,” explained Anthony Miyazaki, professor of marketing at Florida International University in Miami.
“Putting your prospective buyers into a situation where they are required to select from hundreds or even thousands of offers is a recipe for failure,” he told the E-Commerce Times. “Buyers need to feel that they have a choice and feel confident in the choice they are making, but the choice set needs to be controlled to avoid information overload where making no selection can often be the result.”
“When I look at this problem with clients, I ask, ‘How can we group these products better? In what way can we bucket them to make it easier for people?’” added Liz Kressel, CEO of Lizard Strategy, an e-commerce and live shopping agency in New York City.
“If you just lay out your individual products — particularly if you have over 10 SKUs — people will start to get overwhelmed,” she told the E-Commerce Times. “That’s why curation is super important. Consumers can get overwhelmed quickly. It’s why you don’t want to put 30 things on a navigation bar.”
The Kearney report maintained that the consumers of the future want to feel like they are being brought along for the ride. It recommended reorienting consumer research plans around on-the-ground qualitative research, using grassroots marketing, and building feedback loops with consumers to understand their full lifestyle and the joys and challenges they face. Embrace a test-and-learn mentality and enhance consumer-backed design, it added.
“I would urge brands to look beyond traditional research sources and look at more active qualitative feedback loops,” said Liz Miller, a vice president and principal analyst with Constellation Research, a technology research and advisory firm in Cupertino, Calif.
“Be it from digital customer listening posts or from qualitative panels like UserTesting, just be ready to really hear and then be transparent with why you might not be or will be doing something,” she told the E-Commerce Times. “Share those voices and celebrate the good, bad, and ugly.” “But — and this is a big but — if you cannot commit to being transparent on the ride you want to bring customers along on, if your instinct is only to show the good or censor any part of the experience, customers will feel more betrayed and decision fatigue won’t be your only problem,” she added.
Mark N. Vena, president and principal analyst at SmartTech Research in Las Vegas, noted that sellers can enhance consumer involvement in their products by incorporating interactive experiences, such as crowdsourcing product features, designs, or flavors, which can make consumers feel actively invested in the product.
“Engaging storytelling, transparent development processes, and exclusive behind-the-scenes content can strengthen emotional connections,” he told the E-Commerce Times.
“Offering personalized options or co-creation opportunities allows consumers to shape products to their preferences, fostering deeper attachment. Loyalty programs that reward feedback, testing, and advocacy can further cultivate an engaged community around the brand.”
Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm in Bend, Ore., recommended engaging consumers when considering product options to boost consumer interaction.
“Advisory councils work with existing customers, so they feel they have some say in what results,” he told the E-Commerce Times. “Then when the product arrives, the seller points out the features that the customer had direct influence over, creating the impression the product was built for them.”
“This was virtually impossible to do at scale before AI, but now that we have AI, it opens up a wealth of possibilities,” he added.
“The Kearney study shows that for many product categories, a large portion of consumers feel that there are too many options from which to choose,” Miyazaki said. “This presents great opportunities for sellers to work on guiding the purchase decision process — in essence, focusing efforts on buyer development rather than product development.”
“Sellers need to utilize artificial intelligence in the product presentation process,” he continued. “Because no two consumers are the same, it follows that the selling process should be different for each consumer.
“By offering choice sets that match consumer preferences for evaluating feature details, analyzing choices, and even connecting emotionally, sellers can help consumers in their decision processes while at the same time nudging them toward product purchases that will benefit the company’s bottom line.”
Package thieves snatched US$12 billion in goods this year, according to a report released Tuesday by Security.org.
Based on a survey of 11,000 adults in 50 states, the report also noted that one-quarter of American adults have had a package stolen, and 4% (14 million people) suffered a theft within the last three months. The average value of each stolen parcel was $204, meaning nearly $3 billion in e-commerce merchandise was swiped over this past summer, it added.
“America’s thriving economy is pushing ahead, and its robust performance is reflected by continued retail growth, mainly driven by surging e-commerce sales,” the report explained. “Such encouraging signs are a green light for merchants and a beacon for greedy porch pirates.”
“Our survey found that nine out of 10 consumers shop online at least once per month, and half do so weekly,” it continued. “That much activity generates a treasure trove of parcels and millions of possible victims.”
Year over year, package theft is a continual problem, added Security.org Senior Industry Analyst Corie Wagner. “It’s definitely a crime of opportunity, and we see it increase around times when there is more opportunity,” she told the E-Commerce Times.
“When a lot of people started going back to the office after the lockdowns of the pandemic, we saw a surge in package theft rates,” she explained. “And then we see them rise around major shopping occasions, such as the holidays. So we are expecting that during this time of year, package theft is going to increase.”
Package theft is becoming an increasingly serious problem, asserted Jack Berry, president of Security Explorer, a security services broker in Los Angeles.
“This trend could be attributed to the growing reliance on e-commerce for purchases,” he told the E-Commerce Times. “Adding to the problem is the low security among American families, as pointed out by the report, where 42% of the population sometimes leaves their doors unlocked, while around 15% do so even when they are not home. Such negligence makes their homes easy targets for burglars and increases the chances of package theft.”
“Package theft is worsening as online shopping becomes more frequent and convenient,” added Harry Kazakian, founder and CEO of USA Express Legal and Investigative Services, a provider of legal support services in Woodland Hills, Calif.
“The pandemic accelerated this trend, and many people now order multiple packages every week,” he told the E-Commerce Times. “This creates reliable, visible opportunities for thieves, especially the more sophisticated ones who work profitable neighborhoods on a consistent basis — just like kids always seem to know which homes have the best candy at Halloween.”
“Like organized retail crime, package theft has become more sophisticated,” added Suni Shamapande, a principal at PwC, an international professional services company.
“Initially an opportunistic crime, the rise in home deliveries has turned it into a business for some perpetrators,” he told the E-Commerce Times.
After seven years of tracking package theft, it looks like porch piracy may be leveling out, maintained Rebecca Edwards, managing editor and safety expert at SafeWise, a home safety and security company, in Salt Lake City.
SafeWise also keeps tabs on porch piracy, and its numbers are much higher than those of Security.org. “We didn’t see any huge spikes in the number of packages swiped year over year, but the bad news is that loss from package theft is growing — to almost $16 billion,” Edwards told the E-Commerce Times.
“Using our SafeWise proprietary data and national crime statistics, we estimate about 91 million package theft incidents in 2023,” she noted. “That includes incidents where one or more packages were taken, so the total number of individual packages stolen easily tops 120 million. That’s a slight year-over-year increase from 119 to 120 million, but that matches fluctuations in population, so we can safely say that package theft may have reached its zenith.”
One of the challenges of the porch piracy problem is there isn’t any good data on the issue from either the retailers or law enforcement, so we rely on surveys such as these, explained Ed Burnett, former vice president of security and global fraud investigations at United Parcel Service, who is now retired.
“It’s hard to know if the problem is going up or down a whole lot, but it seems to be pretty steady over the last few years,” he told the E-Commerce Times.
Berry advised consumers to be concerned about package theft, especially during the holidays when the volume of deliveries spikes. “Apart from the immediate loss of costly presents or necessary items, package theft comes with the risk of identity fraud,” he explained. “This is because several packages include personal information on their shipping labels, which is a goldmine for fraudsters.”
“This dual threat of financial and identity loss can severely dampen the festive spirit,” he said. “Therefore, heightened awareness and preventive measures are crucial.”
One of the biggest changes Edwards has found this year is that more people are taking action to prevent package theft. “Consumers are getting smarter,” she observed. “Nationwide, just one in four people don’t do anything to deter porch pirates — even though more than half of all Americans told us they worry that they’ll have a package stolen.”
“Those numbers change drastically after someone loses a package — more than eight in 10 added a deterrent after having a package snatched,” she said.
Consumers are also showing more interest in surveillance hardware. Wagner noted Security.org’s survey numbers show 52% of all households — renters and homeowners — have a security camera, compared to 42% in 2023, and 45% have video doorbells, compared to 37% in 2023.
Besides buying security hardware, Melanie McGovern, director of public relations and social media at the International Association of Better Business Bureaus, offers these tips for lowering the risk of becoming a victim of porch pirates:
“Package theft is often an opportunity-driven crime, so the less time a package is visible on the front porch, the better,” Burnett added. “Even something as simple as leaving a note for the delivery person to hide a package behind something on your porch that keeps it from being visible from the street is a great first step.”
Despite increased spending by many businesses, 2025 looks like a lackluster year for customer experience (CX) quality, according to Forrester Research.
“For most brands, 2025 will be another year of CX mediocrity following years of decline and an all-time low in quality in 2024,” Forrester predicts. “That’s because many executives mistakenly interpret strong stock performance amid declining CX quality as a sign to scale back CX efforts.”
“These execs are gambling that their competitors will make the same decision,” it continued, “instead of seizing the moment to differentiate by improving on foundational CX abilities that other companies have neglected.”
While many executives may be mulling cuts in CX, others are choosing to pump more money into enhancing their customers’ experience. In Forrester’s planning guidance for CX released in August, it noted that CX leaders were cautiously optimistic about their resources as they try to reverse declines in CX quality, with 40% planning to increase their overall CX investments above inflation levels in the next 12 months.
According to Forrester’s “2024 US Customer Experience Index” rankings released in June, CX quality among brands in the United States sits at an all-time low after declining for an unprecedented third year in a row.
The research firm cited several factors for the decline, including brands’ inability to provide seamless customer and employee experiences, underwhelming digital experiences using chatbots, and consumers’ concerns about their personal financial situations, society, and the economy at large.
Forrester researchers also found that only 3% of companies could be categorized as customer-obsessed — defined as putting customers’ needs, desires, and satisfaction at the forefront of all business decisions and actions — although customer-obsessed organizations have reported 41% faster revenue growth, 49% faster profit growth, and 51% better customer retention than non-customer-obsessed organizations.
The decline of CX quality and the rise of consumer expectations about that quality have roots in the Covid-19 pandemic.
“The pandemic reduced expectations for CX from the buyer side, but at the same time, it tended to lead management to believe that they could provide less service and still sell product, which was true when expectations were low,” said Anthony Miyazaki, a professor of marketing at Florida International University, in Miami.
“The problem with this is that post-pandemic, buyer expectations began to return to normal levels at a pace faster than that of actual service provision,” he told CRM Buyer.
John Nash, chief marketing and strategy officer at Redpoint Global, a global customer data platform and engagement strategy provider, explained that the pandemic accelerated consumer expectations for seamless, personalized experiences where a brand demonstrates a personal understanding of them as a customer.
“In a post-pandemic McKinsey survey,” he told CRM Buyer, “75% of consumers said that they tried a new shopping behavior during the pandemic, with 71% of consumers reporting that they now expect personalization and 76% saying they are frustrated when they don’t find it.”
The pandemic was a major disruptor for CX, forcing companies to rapidly adapt to an unpredictable environment, observed Craig Crisler, CEO of SupportNinja, a provider of customized outsourcing solutions in Dallas. “With in-person interactions restricted, customers shifted almost entirely to digital channels, which put immense pressure on CX teams to deliver consistent, responsive support online,” he told CRM Buyer.
“Companies scrambled to build out digital infrastructure, sometimes at the expense of quality, just to keep up with demand,” he continued. “As a result, many organizations exposed gaps in their CX strategy, particularly around flexibility and resilience.”
It also amplified the gaps between stated strategy and operational actions, especially in frontline CX functions like service and contact centers.
“While the headlines, corporate mission statements, and earnings calls were touting an age of empathy in experience, where we were ‘all in it together,’ contact centers were pulled in two opposing directions,” explained Liz Miller, vice president and a principal analyst with Constellation Research, a technology research and advisory firm in Cupertino, Calif.
“There were metrics and operational expectations for shortened call times, call deflections, and accelerated issue remediation, which often demanded truncated calls, abrupt resolutions, and just trying to get a person on the other end of the line off a call as efficiently and quickly as possible,” she told CRM Buyer. “There is little room for empathy in a call time metric.”
Increased customer expectations following the pandemic have also impacted CX quality. “Rising customer expectations have completely reshaped the CX landscape,” Crisler said. “Today’s customers demand more than just fast or accurate service. They expect brands to anticipate their needs, personalize interactions, and create frictionless experiences across every channel.”
“This heightened expectation puts pressure on CX teams to be proactive and deeply informed, using data and insights to create a journey that feels intuitive and personalized from the first interaction,” he continued. “For companies, this means CX can no longer be reactive or operate in silos. It must be a dynamic, data-driven part of the entire customer lifecycle.”
“Customers more and more expect frictionless and prompt responses from the vendors they frequent,” added Micah Solomon, a customer experience consultant based in Seattle.
“Integration between human and tech-supplied customer service is a must, as is the quality and thoughtfulness of the technology systems deployed,” he told CRM Buyer.
Social media has also played a role in the rise in consumer expectations. “The continued onslaught of CX-related social media posting also is influencing buyer expectations, particularly for younger audiences,” Miyazaki said.
“Extreme complaining behavior has been normalized to some degree by content creators who, at times, fabricate customer service failures solely for the purpose of gaining views and engagement on social media. This tends to train social media viewers in believing that high levels of service are the norm irrespective of the price point at which they’re paying for service quality.”
“These types of encounters — whether filmed for social clout or not — tend to put undue pressure on frontline personnel and affect the customer experience for all involved,” he continued. “Meanwhile, management is under pressure to fix issues despite having reduced resources to invest in long-term solutions.”
Another influencer of CX quality has been self-service and the rise of artificial intelligence. “Self-service tools have streamlined CX by empowering customers to find answers on their own terms, which is convenient for straightforward or frequent inquiries,” Crisler said.
“However, for complex, high-stakes, or emotionally charged issues, self-service can fall short, leaving customers frustrated. AI may intensify this impact if organizations rely on it too heavily without ensuring that it complements, rather than replaces, human support.”
“When applied thoughtfully, AI can enhance CX by enabling faster responses and predictive assistance, but it should be part of a balanced approach,” he continued. “Routine tasks and high-volume inquiries are well-suited to self-service and AI, while more complex issues benefit from the human touch.”
“By blending self-service tools with easily accessible human support, organizations can create a CX experience that’s both efficient and empathetic, ensuring customers feel valued and understood, not just processed through a system,” he added.
Miyazaki noted that self-service tools have dual effects on perceived customer experiences. “When they work well, they allow customers to complete their tasks without issue and result in a positive encounter,” he said. “But when self-service tools fail, customers tend to become frustrated because resolving an issue now requires an additional step involving humans who may or may not be able to provide immediate solutions.”
“AI, specifically agentic AI, may actually result in higher CX quality when it begins to reach maturity,” he added. “This is because agentic AI will be empowered with unlimited branched decision making based on large datasets and will use pattern recognition and associative learning to build solutions and communications that it creates specifically to satisfy the focal customer.”
Edward Tian, CEO of GPTZero, maker of an AI detection platform in Arlington, Va., pointed out that when it comes to the customer experience, it’s important to remember it includes all interactions and experiences a person has with a company, not just direct customer service interactions. “If a person goes to a website and uses its AI chatbot, that chatbot becomes a big part of their CX,” he told CRM Buyer.
“As AI becomes more heavily ingrained in websites, it is likely that it will only increase how much of an impact self-service tools have on CX,” he added.
Miller noted that consumers are more than happy to traverse down a self-service experience if they see value in the service. “They won’t go down that path again if they fail to see value, have a negative experience, or feel forced into an experience that did not actually meet their needs or expectations,” she said. “While people are typically willing to give people a second chance, they are far less likely to give those self-service bots a pass on a bad outcome.”
She predicted that 2025 will be a year where all eyes will turn to “knowledge.” “The challenge will be how that knowledge is defined, what data is considered to be part of that knowledge graph, and what new sources and resources can be translated into data to truly make knowledge the ultimate hub for CX delivery and optimization,” she said.
“Knowledge in 2025 won’t just be that FAQ bank of answers,” she added. “It will even extend beyond ingesting known content sources to use tricks like gen AI to create new answers.”
Anyone in the data collection business, however, must be mindful of their customers’ privacy, cautioned David McInerney, commercial manager for data privacy at Cassie, a consent and preference management platform, in the U.K. “They need to establish clear data usage policies, obtain explicit user consent, and conduct regular audits to ensure data is handled responsibly and ethically,” he told CRM Buyer.
“As consent fatigue continues growing, with consumers getting fed up with multiple requests even in one single journey, businesses need to make privacy a seamless part of the customer experience so that they can compliantly gather data in 2025,” he said.
Expect an increased focus on ethical AI, where customer data privacy and transparency are prioritized, Crisler added. “Companies that want to build trust will need to be clear with customers about how their data is used and ensure that AI is applied responsibly,” he maintained.
“Flexible CX models that can scale in response to changing customer expectations will be key, with a growing reliance on agile staffing solutions, including outsourcing, to support this adaptability without compromising quality.”
“In 2025, CX won’t just be a function — it’s going to be your entire company,” he declared. “It’ll be the DNA of successful companies. Every touchpoint, every employee, and every decision will have to center around the customer. Brands that don’t treat CX like their company’s central nervous system are going to struggle.”
“In short, 2025 will be the year CX transforms from a department to a company-wide ethos, with every part of the organization playing a role in delivering seamless, empathetic, and personalized customer experiences,” he predicted.
Search engines using artificial intelligence could harmfully disrupt the digital economy, warns a researcher at Harvard’s Berkman Klein Center.
“[I]f AI search becomes our primary portal to the web, it threatens to disrupt an already precarious digital economy,” Benjamin Brooks wrote in a recent article in the MIT Technology Review.
“Today, the production of content online depends on a fragile set of incentives tied to virtual foot traffic: ads, subscriptions, donations, sales, or brand exposure,” he explained. “By shielding the web behind an all-knowing chatbot, AI search could deprive creators of the visits and ‘eyeballs’ they need to survive.”
Brooks urged the AI industry to address the content compensation problem before others do it. “The AI industry should use this narrow window of opportunity to build a smarter content marketplace before governments fall back on interventions that are ineffective, benefit only a select few, or hamper the free flow of ideas across the web,” he wrote.
“We need to bear in mind that these new systems, these new business models, are just taking off,” he added in an interview with TechNewsWorld, “but however we respond to these challenges, it’s important we do so in a thoughtful, measured and targeted way. That’s why industry should take the lead here.”
“Government is now more confident regulating content and regulating bargaining than it ever was before,” he said. “The AI search industry should be mindful of that. With that additional pressure over the coming years, the industry should get ahead and build a smarter solution before government turns to blunter solutions.”
So far, the impact of AI search on the wallets of content creators is still foggy. “It’s not yet clear, but there is a strong argument to be made that there will be reduced traffic to many publishers,” said Greg Sterling, co-founder of Near Media, a news, commentary, and analysis website.
“The evidence is mixed,” he told TechNewsWorld. “During the Google ‘SGE’ period, there was evidence that organic links were being pushed down the page and therefore [were] less visible.” Introduced in December 2023, Google’s Search Generative Experience provides overviews of search topics using AI.
“However,” he continued, “there was little research on actual click behavior. Google claims that links within AI results get more engagement. We need to do more research on this issue.”
Chris Ferris, senior vice president of digital strategy at Pierpont Communications, a public relations agency in Houston, added that AI search will exacerbate the problem that already exists with traditional search. “Most web pages don’t get any traffic from organic search,” he told TechNewsWorld.
He cited research published by Search Engine Land predicting that organic traffic will fall between 18% and 64% because of AI search.
Mark N. Vena, president and principal analyst at SmartTech Research in Las Vegas, noted there is growing evidence that AI-driven search, such as generative AI summaries in search engines, has caused a decline in click-through rates to content providers’ websites, as users increasingly consume information directly from AI responses.
“News outlets and niche content creators have reported reduced traffic from traditional search sources when AI systems generate comprehensive answers,” he told TechNewsWorld. “While detailed impact studies are ongoing, this trend indicates potential risks to publishers’ ad revenue and visibility.”
“Without doubt, AI-driven search tools risk reducing traffic to content providers’ sites, potentially undermining ad revenues and subscriber models,” he added.
“Without users clicking through to original sources, content creators may struggle to monetize their work, threatening the sustainability of quality journalism and niche content. Balancing AI-driven convenience with adequate attribution and redirection to content providers will be essential to preserve a healthy digital content ecosystem.”
Dev Nag, CEO and founder of QueryPal, an enterprise chatbot based in San Francisco, asserted that the narrative that AI search will destroy content creation by stealing eyeballs fundamentally misunderstands how content ecosystems have evolved.
“Think about how we transitioned from paid newspapers and centralized TV/movie studios to ad-supported online content,” he told TechNewsWorld. “Each shift brought predictions of doom, yet we ended up with far more content — and from more content creators — than ever.
“AI is poised to dramatically expand content reach through better discovery, translation, and personalization. Rather than destroying the content economy, AI search is likely to create a more efficient marketplace where quality content finds its intended audience more effectively.”
He contended that the evidence so far doesn’t support the “eyeball apocalypse” narrative.
“While AI search is changing how people discover content, we’re seeing content creators adapt by producing more focused, high-quality material that AI systems can better understand and distribute,” he said. “The real transformation isn’t about losing eyeballs. It’s about shifting from a mass-market advertising model to more sophisticated monetization approaches.”
Nag predicted two primary models emerging: “content licensing,” where creators get paid for allowing AI systems to learn from and reference their work, even if it’s available openly otherwise, such as the recent Google-Reddit agreement, and a “value-share” system, where AI platforms distribute revenue based on how often they reference and synthesize a creator’s content.
“That’s currently possible with RAG-based systems that are able to provide explicit references — like Perplexity — and could be adapted to systems which are directly trained through sophisticated attribution tracking,” he explained.
“Search engines could do as TikTok and YouTube do and share their revenue to build up creators feeding their services,” added Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm in Bend, Ore.
“However, as AI advances,” he told TechNewsWorld, “it may need less and less human creators, which will be problematic to this future outcome.”
Ross Rubin, the principal analyst at Reticle Research, a consumer technology advisory firm in New York City, pointed out that AI search is the culmination of something seen over the course of decades.
“Back in the day, long before AI, there was Ask Jeeves,” he told TechNewsWorld. “It didn’t execute on the idea very well, but the idea was, rather than get a whole bunch of links, you got an answer. In many cases, that’s what the person searching wants. It’s a better experience to be given information up front and not have to piece it together or track it down from multiple information sources.”
In his article, Brooks was critical of AI companies cutting deals with big media companies to avoid litigation or government intervention. “This policy of selective appeasement is untenable,” he wrote. “It neglects the vast majority of creators online, who cannot readily opt out of AI search and who do not have the bargaining power of a legacy publisher.”
“It takes the urgency out of reform by mollifying the loudest critics,” he continued. “It legitimizes a few AI firms through confidential and intricate commercial deals, making it difficult for new entrants to obtain equal terms or equal indemnity and potentially entrenching a new wave of search monopolists.”
“In the long term, it could create perverse incentives for AI firms to favor low-cost and low-quality sources over high-quality but more expensive news or content, fostering a culture of uncritical information consumption in the process,” he added.
At this point in the development of AI search, Sterling said it’s still too early to tell how the game will play out. “We have many assumptions and fears but need to test them and produce real data so that we’re not operating from a place of pure conjecture,” he observed.
Meta is reportedly working on an AI-powered search engine that will crawl the web for information, a move that could disrupt how advertising is sold online.
Currently, Meta’s AI chatbot gets information about news, sports, stocks, and other current events from Google and Bing, a situation the company is looking to change, according to a report appearing Monday in The Information.
By cutting outside search engines out of chatbot interactions, Meta hopes to sell hyper-targeted ads that it can sell at premium prices.
Total control of the chatbot interaction is also likely to keep a user on a Meta app longer, so it has more time to feed them more ads.
“By Meta entering into the AI Search arena, more of the data they are acquiring will be happening from first-party data without relying on reporting and third-party data from other sources,” explained Amanda Robinson, CEO of The Digital Gal, a digital marketing agency in Toronto.
“I see that this has the potential to replace tracking methods of the past like Pixels on websites and can shift us closer to more relevant ads being shown to the right people,” she told the E-Commerce Times. “This is a win-win for both the users and the advertisers.”
It would also be a win for Meta. “Ad rates could go higher,” said Ross Rubin, the principal analyst with Reticle Research, a consumer technology advisory firm in New York City.
“Today, you know something about someone doing a search because of their previous search history, but you could understand a lot more about a person with AI, depending on how they engineer their prompts, how they follow up, and other things that they’re doing,” he told the E-Commerce Times.
If a Meta search engine made Facebook or Instagram more sticky, that would allow it to reach more online users, explained Chris Ferris, senior vice president of digital strategy at Pierpont Communications, a public relations agency in Houston.
“Google Ads work as well as they do because they are driven by people conducting searches with high intent,” he told the E-Commerce Times. “Facebook and Instagram ads are based on assumptions about what a person likes. If I like a bunch of soccer content, I see ads for soccer cleats. But I’m 55. I don’t play soccer anymore. If Meta can layer search data on top of their other information about their users, that could be very powerful.”
However, he added: “Color me skeptical that Meta is good at developing new technology. I suspect this will go the way of their mixed reality headsets: a lot of money spent with very little return.”
Kaveh Vahdat, founder and president of RiseOpp, a fractional CMO agency in San Francisco, noted that Meta’s development of a search-enabled AI chatbot signals a potential shift in online advertising and search dynamics.
“Unlike Google’s fact-based search model, Meta’s AI aims to deliver conversational answers that integrate current events with personalized recommendations,” he told the E-Commerce Times. “This approach could alter user engagement and possibly shape online ad spending as businesses adopt a more dialogue-centric advertising model. By integrating AI with existing social data, Meta could target ads more dynamically, making ads feel less intrusive and more part of users’ online journeys.”
“While Google has a stronghold in search with around a 90% market share, Meta’s entry could challenge this dominance, especially as user preferences shift towards conversational and integrated search experiences,” he added. “Meta’s AI could leverage real-time data from its social platforms to generate highly personalized and targeted ads — something traditional search engines don’t currently offer in the same way.”
As formidable a challenge as Meta could pose to Google’s search dominance, it’s unlikely to do so. “Meta’s foray into search is a long shot, and I don’t see it changing the industry in any meaningful way,” said Jordan Stevens of Jordan Stevens Digital Marketing, a consulting practice in Toronto.
“Consumer behavior is behind Google’s massive lead, and that’s hard to change,” he told the E-Commerce Times.
Malik Ahmed Khan, equity analyst for technology at Morningstar Research Services in Chicago, pointed out that the reported search functionality is geared toward people searching within Meta’s ecosystem. “I don’t believe Meta wants to or has a long-term vision of making a standalone search product,” he told the E-Commerce Times.
“Could this mean lower search volumes as people engage with more search within Meta’s FoA [family of apps]? Sure,” he continued. “We don’t see this as a significant threat to Google’s dominance over search, however.”
“The primary case we’d make for this is that search as a stand-alone product is still responsible for the vast majority of searches online,” he said. “It is unlikely that Meta’s search product — whenever it is rolled out, which, by the way, could be some time away — could take a material portion of monetizable searches away from Google.”
“Building a Google Killer isn’t really the goal here,” added Dev Nag, CEO and founder of QueryPal, an enterprise chatbot in San Francisco.
“It’s about making their platforms more capable and self-sufficient while reducing dependency on potential competitors,” he told the E-Commerce Times. “The real battle isn’t for traditional web search, but for being the primary interface through which people discover and interact with information in their digital lives.”
Development of a web crawling engine could be the beginning of a larger scheme by Meta, contended Baruch Labunski, CEO of Rank Secure, a website development and search engine optimization firm, in Toronto.
“It is an open secret the larger social media platforms, namely Meta and X, want to dominate the web with ‘everything platforms,'” he told the E-Commerce Times.
“That means you would go there to search, use the chatbot, go onto social media, buy and ship products, and do all sorts of transactions,” he said. “It could even evolve into a financial system for each platform with crypto as the primary exchange. Such a development would greatly cut into Google’s share of the internet pie as people wouldn’t need it anymore.”
“Google could become Ask Jeeves unless it offered something more to get customers to stay on its search,” he added.
Anthony Miyazaki, a professor of marketing at Florida International University, in Miami, argued that Google might be wise to give up market share purposely to avoid government intervention that could destroy its dominance.
“This is where Meta comes into play,” he told the E-Commerce Times. “Meta’s search functions on Facebook and Instagram have been substandard for years. In fact, the impressive search capabilities of TikTok are what seemed to have recently awakened Meta to its search deficiencies now that TikTok is the primary search platform — over Google even — for younger audiences.”
“Zuckerberg starts with an advantage because AI integrations into search have already been tested by Google and Bing,” he continued. “Starting with AI as the base for search will create a more connected search experience that likely will appeal to Meta’s Instagram and Facebook audiences.”
The retail industry is bracing for more than just the usual surge of cyberattacks this holiday shopping season.
Artificial intelligence-driven threats pose significant risks to both retailers and consumers. According to the latest report from Imperva Threat Research, retail websites are already facing an average of 569,884 AI-driven attacks each day.
Among the most persistent challenges is the rise in advanced bad bot traffic, which has surged by 58% compared to last year. Imperva’s research reveals that evasive bad bots now account for 70% of harmful traffic targeting retail sites, far higher than the 51% seen on other websites.
These bad bots use sophisticated tactics, including rotating random IPs, leveraging anonymous or residential proxies, altering identities, imitating human behavior, delaying requests, and even bypassing Captcha challenges. Their “low and slow” approach enables them to fly under the radar, executing damaging attacks with minimal requests.
“This approach minimizes the ‘noise’ typically generated by bad bot campaigns, making them harder to detect,” Gabriella Sharadin, content manager for Imperva’s Threat Research Unit, told the E-Commerce Times.
Cybercriminals increasingly use AI-driven technologies to enhance the scale and sophistication of their attacks on e-commerce platforms. This is a critical time for online retailers who must prepare for a range of AI-driven threats, including bots, distributed denial of service (DDoS) attacks, API violations, and business logic abuse.
“While cybersecurity threats are a concern year-round, they become even more pronounced during the holiday shopping season, when retailers often experience record-breaking sales,” Nanhi Singh, GM of application security at Imperva, told the E-Commerce Times.
She added that cybercriminals are using generative AI tools and large language models (LLMs) to capitalize on the increased volume of digital transactions, limited-time promotions, and gift cards and loyalty points stored in customer accounts.
To mitigate these threats, retailers must adopt a defensive plan that addresses these attacks and allows them to respond swiftly without disrupting the shopping experience, Singh offered. Without robust defenses, retailers risk facing a perfect storm of AI-driven attacks that could disrupt operations, compromise customer data, and tarnish their reputations.
Imperva’s research reveals these attacks originate from general-purpose AI tools like ChatGPT, Claude, and Gemini, alongside specialized bots designed to scrape websites for LLM training data. An analysis of these attacks shows that cybercriminals primarily use AI tools to carry out specific types of threats, such as business logic abuse (found in 43% of all attacks), DDoS and bad-bot attacks, and API violations.
“Successful attacks can lead to identity theft, monetary loss, and a loss of customer trust in e-commerce platforms, with fraudulent charges and unauthorized account access negatively affecting consumers’ shopping experiences,” warned Sharadin.
Bot management solutions can help filter out bad bots from the mix. An anomaly detection tool can help identify non-human traffic in real time to minimize disruption from these digital deviants.
“Regular audits of business functions can help find vulnerabilities before they’re exploited and ensure retailers’ online presence is not compromised,” Sharadin added.
Retailers should also ensure their infrastructure is prepared to handle increased traffic without compromising performance by using servers that can scale to meet demand.
Another strategy is implementing a content delivery network (CDN) to distribute traffic more efficiently and use a waiting room queuing system during peak periods. This approach can also help create a seamless consumer experience.
“A waiting room controls traffic flow to a site or app using a first-come-first-served approach, which prompts a fair experience for legitimate users during high-profile events and sale times,” she said.
Sharadin suggests that online retailers establish a baseline for expected API behavior, including typical traffic rates and user geographies, to proactively defend against automated applications and API abuse before the holiday shopping season.
“This helps detect anomalies like unusual spikes in traffic on rarely used APIs, like ‘write’ APIs, which push updates to systems,” she explained.
It is also vital that retailers understand how users access their APIs and apply rate limits by session and IP to prevent abuse. This strategy is especially prudent when API keys (a unique code used to authenticate a user) are involved.
“Retailers should maintain an audit trail of user activity to enable their developers and security teams to monitor traffic logs, making identifying and investigating potential malicious bot activity easier,” Sharadin added.
Not all of the burden of cyber safety rests with the retailers. Cybercriminals leverage AI to extract shoppers’ sensitive personal information, such as credit card details, addresses, and account information.
End users must learn to recognize abnormal activity on their websites and online accounts. Signs of a compromised account include:
According to Sharadin, generative AI is now a double-edged sword in cybersecurity. It provides powerful tools for threat defense but also aids cybercriminals in launching more sophisticated attacks.
“AI-powered threats can automate phishing campaigns, create convincing fake identities, and adapt in real time to bypass security defenses,” she summarized.
For e-commerce businesses, this means encountering more advanced and persistent attacks that precisely target vulnerabilities and enable fraud while remaining undetected.
Despite recent hurricane impacts, the economy generally remains strong, with consumer spending driving growth in the 2024 winter holiday season, according to the National Retail Federation (NRF) retail sales forecast released Oct. 15.
The Washington, D.C.-based NRF advocates for the people, brands, policies, and ideas that help retail succeed. Retail is the nation’s largest private-sector employer, contributing US$5.3 trillion to annual GDP and supporting more than one in four jobs in the United States.
The report highlights a 3.4% year-over-year rise in retail sales, with holiday sales forecasted to grow between 2.5% and 3.5%, totaling between $980 billion and $990 billion. A shorter holiday shopping period and ongoing inflation pose challenges, but early marketing and e-commerce growth are mitigating factors.
Employment remains healthy, with wages growing and consumer credit showing stability. This forecast aligns with pre-pandemic holiday sales growth rates.
“The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value,” Matt Pavich, senior director of strategy and innovation at pricing optimization solutions provider Revionics, told the E-Commerce Times.
Sale promotions, in general, will play a larger role this shopping season. Retailers will contend with shrinking shopper loyalties, a growing number of competitors across more channels, and a more dynamic landscape where prices are shifting more frequently to win over consumers looking for great deals, Pavich said.
Consumer spending, which makes up 70% of economic activity, has remained stable despite lingering inflation, particularly in services, he added. Wage growth has generally outpaced inflation, with goods inflation being flat to negative and food inflation moderately increased.
“Retail sales have shown consistent growth for 52 consecutive months, with a 3.4% increase in the first eight months of the year compared to the same period in 2023,” he offered.
Pavich noted that the holiday shopping period between Thanksgiving and Christmas will be six days shorter, impacting logistics and consumer expectations. To compensate for the shorter period, retailers started marketing and promotion campaigns earlier.
The shorter period may pressure the supply chain and fulfillment, affecting consumer convenience expectations. Non-store sales, including e-commerce, are expected to contribute to increased shipping value during the holiday season, he observed.
The NRF forecasts holiday sales growth between 2.5% and 3.5% above last year’s holiday season. The forecast includes e-commerce, which is expected to grow between 8% to 9%, totaling $295 billion to $300 billion.
A related bright spot is the seasonal hiring this shopping season. NRF expects between 400,000 and 500,000 workers, reflecting a fully staffed retail industry.
The forecast methodology considers 20 economic data points, including GDP, employment, income, inflation, and interest rates.
“To reiterate, we are forecasting holiday retail sales will increase between two and a half to three and a half percent above last year’s holiday season,” emphasized Bill Thorne, senior vice president for communications and public affairs at NRF.
That works out to approximately $980 billion in sales compared to $955 billion in total holiday spend in 2023. Sales growth is consistent with the pre-pandemic average holiday annual increase of 3.6% from 2010 through 2019, he added.
“From what I hear, consumers have a continuing capacity to spend, and this year will be a record level of spending,” he said.
According to the NRF’s chief economist, Jack Kleinhenz, a 3% growth in the Gross Domestic Product (GDP) in the second quarter and a lower relative cost of energy helped consumer spending remain resilient. Household balance sheets also are in good shape. That credit goes to increased savings and net wealth, up 7.1% in the second quarter.
Although consumers still feel an economic pinch, inflation has cooperated. The Personal Consumption Expenditures Price Index (PCE) deflator is down to 2.2%, and retail prices are slightly lower than a year ago.
“Nevertheless, we are still believing that even with the inflation that persists to a certain degree, spending should be in a positive mode,” he predicted.
Kleinhenz announced that employment and labor remain healthy, with average monthly job gains of 186,000 workers in the last three months and an unemployment rate of 4.1%. However, weekly unemployment claims have been impacted by hurricanes and a Boeing strike, but overall employment data remains positive.
The U.S. Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS) data shows impressive job openings and hiring, indicating a robust labor market. Wage growth has been consistent, with wages up by 4.1%, said Kleinhenz.
Credit and business data information company Experian’s latest Holiday Spending Trends and Insights report reveals key shifts in shopping behaviors. Researchers surveyed 1,000 consumers to compare holiday spending habits to data from the previous year.
The results identified the following trends:
“The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under-invest in their stores,” Nikki Baird, vice president of strategy and product at retail technology company Aptos, told the E-Commerce Times.
Investments in labor, customer experience tech, and digital transformation of stores have been too easy to kick the can down the road until you suddenly realize no road is left, she asserted.
Poor-quality product data routinely has severe implications for retailers. If left unresolved, bad data hinders the effectiveness of business operations, product search and discovery, customer satisfaction, and sales.
Bad product data, often hiding in plain sight, can critically impact retailers’ bottom lines. According to information technology firm Gartner, poor data quality costs organizations an average of US$12.9 million annually. It compounds the immediate impact on revenue in the long term. Besides increasing the complexity of data ecosystems, bad data leads to poor decision-making.
To make the impact of bad data on retailers more visible, SaaS-based e-commerce search and product discovery platform GroupBy hosted a webinar in September with Google Cloud partner Sada and e-commerce firm Rethink Retail. Titled “Bad Data, Big Trouble: How to Turn the Corner on Poor-Quality Product Data,” the event explored how businesses can use AI to enrich data, improve search relevancy and product discovery, boost customer satisfaction, reduce operational expenses, and increase revenue.
The key to this level of success is rooted in analyzing product data quality and identifying areas for improvement. Best practices include establishing a standard data collection model, conducting regular reviews, and implementing AI-powered solutions to automate cleaning, standardizing, and optimizing product data at speed and scale.
Thus, AI-powered data enrichment can improve operational efficiency, fuel growth, and enhance brand reputation. According to Arvin Natarajan, GroupBy’s director of products, poor-quality product data plagues nearly every retailer today, impacting every application that relies on data to perform.
“Long-term, insufficient data negatively affects the customer experience and, ultimately, your bottom line,” he said.
Sophisticated generative AI models trained on GroupBy’s proprietary global taxonomy library can identify common data issues and revolutionize product data attribution and management, he offered.
GroupBy’s e-commerce search and product discovery platform, powered by Google Cloud Vertex AI, offers retailers and wholesalers unique access to Google Cloud’s next-generation search engine. Designed for e-commerce, the platform uses AI and machine learning to process 1.8 trillion events and gather 85 billion new events daily from Google’s entire product suite.
With access to this data, GroupBy delivers digital experiences with a deep understanding of user intent. Natarajan noted that its partnership with Google ensures that customers benefit from any future AI innovations Google develops.
Incomplete, inaccurate, and inconsistent product data can hinder search and discovery, leading to lost revenue and reduced customer loyalty. Natarajan highlighted the importance of AI in data enrichment, citing a 20% increase in e-commerce sales after optimizing product catalog data for search and discovery.
Technology, or not using it correctly, can make it difficult for retailers to recognize the existence of bad data. Recounting an example from his earlier days working at eBay, Rethink’s E-commerce Strategist Vinny O’Brien presented an example of how faulty indexing caused an ongoing loss of revenue from suddenly invisible product listings.
It took working with a partner to uncover that eBay failed to normalize any product data. So, if someone searched for a Nike shoe, for instance, but the product data lacked a capital N in the formatting when the product was uploaded, that product disappeared after the first phase of the search.
That failure was not limited to just this one product entry. It was a systemically recurring result for other retailers on the platform.
“So you just disappeared. You lost about 30% of your search volume. When we eventually fixed the problem, which was not an easy job at a company of that size, we were recovering revenue at a rate of about 20% to 25% for organizations, particularly ones that had large catalogs, because we got a lot of long, long tail search and so on. But it is a significantly impactful area,” he detailed.
According to Joyce Mueller, director of retail solutions at Sada, the bad data problem is more of an unexpected consequence than a deliberate effort to deprioritize product data. It has always been a long-standing problem.
Bad data results from incomplete, inaccurate, or missing fields. Perhaps the wrong data specifications are supplied, or inconsistency is at play across SKUs, she suggested. Lacking clean data pipelines to bring it all together, we end up with data that is not necessarily as complete as we would like it to be, Mueller continued.
“Mostly, this has been a problem for back-end systems. But now, having product data that isn’t complete, accurate, well described, or in a good style and character actually causes problems for digital shoppers. It makes your product less discoverable,” she warned.
Applying a one-size-fits-all standards method is a losing battle. Earlier efforts failed to achieve universal success.
O’Brien noted that around 2010, all the major e-commerce retail platforms pushed marketers to comply with a standard data set for every product to make them visible. Adopting that premise was only a good strategy up to a point.
“I think managing the scale of data is the challenge when you have those large companies make that kind of mandate,” he offered. “It needs to be accepted by everybody, and everybody has to conform.”
The scale of that management plus data governance is huge, he added. Various industries come into play, whether it is business-to-business or business-to-consumer. Within these verticals, might be food-grade applications or medical-type products, he said considering other complications in compliance.
“Different types of industries also have nuances of their own. Managing all of that at scale is tremendously difficult,” O’Brien argued.
Natarajan added that when talking to retailers or distributors at conferences, he sees a gap between manufacturers and retailers. In the end, it is a hole that retailers must also manage, so a lot of nuance has to be navigated.
“There are a lot of challenges to manage this type of data at scale, which I think is probably the reason why we have not seen a level of standardization in product data extended to all the different industries, all the different verticals, and retailers of every size,” he reasoned.
Sada’s Mueller said she wasn’t aware of any retail sub-vertical handling it well. But she sees digital natives handling it better simply because it is new.
“When we think of traditional retailers, they have long-standing systems that do not necessarily talk to each other. It is harder for someone more of an incumbent to fix these sorts of problems and to form and fashion themselves in a way that adopts the new technology. They have a bigger legacy with more technical debt,” she observed.
Some industries may have a better chance of managing their data because the products are less complex. According to Natarajan, you would have less product attribution in some of these categories than you would have in maybe more technically complex products, like machines and engines and things like that.
“You have this difference in types of products that will lead to better data governance, just because it is easier to manage some of these less complex products,” he said.
The panel of experts discussed steps distributors and retailers can take to become more mindful of actions they can take to help overcome the bad data problem.
The streaming television industry has been accused of operating a massive data-driven surveillance apparatus that is transforming TVs into sophisticated monitoring, tracking, and targeting devices.
In a 48-page report released Monday, the Washington, D.C.-based Center for Digital Democracy (CDD) outlined how the connected TV (CTV) industry captures and harvests information on individuals and families through a sophisticated and expansive commercial surveillance system, deliberately incorporating many of the data-gathering, monitoring, and targeting practices that have long undermined privacy and consumer protection online.
“CTV has just replicated the commercial online surveillance ecosystem,” said CDD Executive Director Jeffrey Chester, who co-authored the report with Kathryn C. Montgomery.
“They’ve simply recast the original sins they’ve done repeatedly online,” he told TechNewsWorld. “They’re working with data brokers now. They’re working with adtech companies. They’re working with measurement companies. So there’s this multilayered, connected television surveillance system that no individual can really address.”
“It’s become a privacy nightmare because it’s happening throughout the television system, and regulators have really done nothing about it,” he added.
According to the report, leading streaming video programming networks, CTV device companies, and “smart” TV manufacturers, allied with many of the country’s most powerful data brokers, are creating extensive digital dossiers on viewers based on a person’s identity information, viewing choices, purchasing patterns and thousands of online and offline behaviors.
It also maintained that surveillance has been built directly into television sets, with major manufacturers’ smart TVs deploying automatic content recognition (ACR) and other monitoring software to capture an extensive, highly granular, and intimate amount of information that, when combined with contemporary identity technologies, enables tracking and ad targeting at the individual viewer level.
“People watch TV in the privacy of their own homes and have a reasonable expectation that no one is watching them watch,” said Jacob Hoffman-Andrews, a senior staff technologist at the Electronic Frontier Foundation, an international non-profit digital rights group based in San Francisco.
“The trend of building surveillance into all new smart TVs is incredibly invasive and little understood,” he told TechNewsWorld. “When people buy a device, they expect that device to serve their needs, not the manufacturer’s desires. Nobody wants a snooping and snitching television, but lately, that’s all you can buy.”
Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm in Bend, Ore., pointed out that while the report highlights the potential for problems, it doesn’t provide any hard evidence of wrongdoing.
In addition, he continued, using the harvested information to create more effective ads or better programming, which has largely been accepted by users as a tradeoff for better programming and advertisements that speak to them.
“There isn’t much substance here, and the question must be asked of the user whether they are OK with this before acting with the assumption they aren’t,” he told TechNewsWorld. “Too often, we try to fix ‘problems’ that aren’t problems at all to the people affected by them, so care must be taken to assure the remedy addresses something people want fixed. Better programming and ads aren’t a problem to most users.”
The report also noted that CTV has unleashed a powerful arsenal of interactive advertising techniques, including virtual product placement inserted into programming and altered in real time. Generative AI enables marketers to produce thousands of instantaneous “hypertargeted variations” personalized for individual viewers, it added.
“A major pain point with ad-based streaming is when the ad repeats too many times or viewers seeing ads they don’t feel are relevant to them,” explained Sarah Lee, a research analyst with Parks Associates, a market research and consulting company specializing in consumer technology products, in Addison, Texas.
“Just 29% of ad-based streaming viewers feel the ads they see are for products and services that are relevant to them,” she told TechNewsWorld. “CTV players are working on features that will heavily use AI to align ads with household preferences and the content surrounding the ad so that viewers see more relevant ads.”
Incorporating interactive features, such as social media elements or direct shopping through ads, into streaming platforms is a concerning trend, noted Barry Lowenthal, president of Inuvo, an advertising solutions company headquartered in Little Rock, Ark.
“The convergence of streaming with e-commerce and social media ecosystems means that companies can now track an even broader range of online behaviors, combining this data with information from other platforms,” he told TechNewsWorld.
“Moreover, many of these devices operate in connected environments where data from smart TVs can be cross-referenced with data from other internet of things [IoT] devices in the home. This creates even more comprehensive profiles of users, often without their knowledge.”
In tandem with the report’s release, the CDD submitted letters to the chairs of the FTC and FCC, as well as the California Attorney General and the California Privacy Protection Agency, calling on policymakers to address its report’s findings and implement effective regulations for the CTV industry.
“Policymakers, scholars, and advocates need to pay close attention to the changes taking place in today’s 21st-century television industry,” co-author Montgomery said in a statement.
“In addition to calling for strong consumer and privacy safeguards,” she continued, “we should seize this opportunity to re-envision the power and potential of the television medium and to create a policy framework for connected TV that will enable it to do more than serve the needs of advertisers.”
“Our future television system in the United States should support and sustain a healthy news and information sector, promote civic engagement, and enable a diversity of creative expression to flourish,” she added.
Mark N. Vena, president and principal analyst at SmartTech Research in Las Vegas, noted that government regulation of the streaming industry may be necessary to protect consumer privacy and prevent data exploitation.
“Measures could include enforcing transparency in data collection practices, requiring clear and accessible privacy policies, and limiting the amount of personal information companies can harvest without explicit user consent,” he told TechNewsWorld. “Additionally, regulations could impose stronger security standards to safeguard user data and hold companies accountable for breaches or misuse of sensitive information.”
Greg Sterling, co-founder of Near Media, a website focusing on search, social media, and local digital commerce, added that non-consensual data harvesting has been and continues to be a problem across digital platforms.
“Virtually all the scenarios in the report involved opt-out provisions buried in terms and conditions or other difficult-to-find and utilize places,” he told TechNewsWorld. “The attitude of these companies is the more data, the better, and we’ll deal with the consequences if there are any.
“The government does need to get involved,” he continued, “and there needs to be comprehensive privacy regulation that requires all but the most basic data collection to be consent-based with serious penalties for violators.”
Settle, the developer of an operations platform that helps consumer packaged goods (CPG) brands scale, launched its expanded procurement and inventory management suite this month following the acquisition of inventory management firm Turbine.
This acquisition brings advanced inventory operations and forecasting capabilities to Settle’s cash flow management platform. It aims to streamline payments, purchasing, and financing operations for omnichannel brands, enabling them to scale faster and more profitably.
The new platform addresses significant pain points for CPG founders and operators, who often spend countless hours navigating disconnected systems and manually consolidating data from spreadsheets, inventory, and bill pay platforms.
According to Settle, these manual processes reduce accuracy and visibility at the SKU level. Brand operators report needing to update an average of six separate systems for a single SKU, leading to costly errors, stockouts, and poor margin management.
Alek Koenig, Settle’s CEO and founder, said this launch and acquisition position Settle to transform how small businesses leverage their inventory and finance operations to unlock faster, more profitable growth.
“As the first and only integrated platform built specifically for CPG brands, Settle is dedicated to helping omnichannel brands scale from idea to shelf, including access to the same transparent financing we are known for — on one unified platform,” he told the E-Commerce Times.
Koenig noted that the new Settle platform enables CPG brands to achieve higher margins with a leaner team and ultimately drive their bottom-line savings. The automatic three-way match feature helps brands identify costly discrepancies. It includes SKU management and reconciliation across purchase orders, invoices, and bills.
Brands can now order and receive the inventory they need by auto-syncing to sales channels like Shopify and the warehouse management systems used by thousands of third-party logistics companies nationwide. AI-powered inventory forecasting increases accuracy and reduces manual guesswork.
Using machine learning models (MLMs), brands can forecast demand for existing product sets, receive recommended timelines for ordering finished goods and raw materials, and predict lead times based on historical data. These capabilities ensure an optimal balance between avoiding stockouts and maintaining healthy cash flow by minimizing excess inventory and reducing the risk of lost sales.
“The new Settle functionality creates a unique trusted source spanning all supply chain-related functions. This integration allows CPG brands to stay focused on business and not on piecing together information,” according to Chris Jacob, CFO of HigherDose, a wellness company in New York City.
“For all retailers, cash and inventory are synonymous. Only Settle’s functionality consolidates insight into the more elusive aspects, such as three-way matching and changes in landed costs. Settle serves our business holistically, and we have left single-solution providers behind for good,” he said.
According to Koenig, financial operations platforms play a critical role by ensuring that a brand’s processes — from procurement and inventory management to payments and inventory financing — are connected.
For omnichannel businesses, having real-time visibility into inventory and accuracy down to the SKU level ensures margins are maximized, prices are set at optimal levels, and goods are on hand to make the deal.
“While direct-to-consumer [DTC] only brands find a lot of value, it becomes a lot more challenging when you are omnichannel, so the pain point is that much greater,” he said.
Settle’s new platform enables CPG brands to proactively manage their inventory, cash flow, and vendor relationships. These features help ensure a seamless shopping experience for customers across all channels.
“Settle harmonizes all inventory and financial operations in one platform to simplify the additional complexities of omnichannel brands,” he added.
Automating back-office tasks eliminates remedial but necessary business chores. Procurement, inventory management, and payment features automate tasks like calculating landed costs, leaving more time for businesses to focus on expanding.
Koenig described Settle as the only platform in the market that is built specifically for CPG brands. It helps flip the traditional reactive supply chain management model to proactive by breaking actions into to-dos across all workflows, from SKU management to inventory reordering.
CPG brands face challenges like supply chain disruptions. Take, for example, the recent East Coast dockworkers’ strike at shipping ports, which is temporarily suspended. Other challenges include the impact of inflation, pricing pressure, and labor shortages, all of which can seriously strain their operational efficiency.
“Managing cash flow and inventory effectively has become more complex for CPG as brands juggle multiple sales channels and fulfillment locations, as well as external challenges,” noted Koenig.
Brands often complain about disruptions like stockouts, overstocking, and a lack of margin visibility. These hurdles make it harder for them to scale effectively and convey accurate financial metrics if they are talking to investors.
Koenig added that Settle addresses these challenges for CPG brands. Its unified platform eliminates self-built spreadsheets, copying and pasting data from multiple systems, and not trusting the resulting accuracy and visibility on costs and margins.
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