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Buy now pay later, or “BNPL” services are growing in popularity during the pandemic as they enable consumers to pay for purchases over a short time with no interest and a small starting payment.
However, money experts urge caution. Similar to credit cards, BNPL services can negatively impact credit scores and land people in debt or collections if not used properly. A recent survey found that only 43 percent of people who have used a BNPL service understand all of the terms and conditions.
Accessing BNPL payment options just got a whole lot easier for consumers comfortable with PayPal. That online payment service last month announced a new buy now pay later installment solution of its own.
PayPal’s new “Pay in 4” program offers a short-term- four-payment installment for customers in the U.S. It is designed to help merchants drive conversion, revenue, and customer loyalty without taking on additional risk or paying any additional fees. The program also enables consumers to make a purchase and pay off their purchase with four interest-free installments.
BNPL programs have been around for a while, but they have seen a growth in popularity recently. One of the reasons is that e-commerce brands are increasingly adopting BPNL programs as a payment option, according to Ruba Aramouny, owner and strategic director of Solid Marketing.
“This helps them reach more target markets, convert more shoppers into buyers, and differentiate their webshops from the competition,” she told the E-Commerce Times.
More than one-third of consumers who use BNPL services want to avoid paying credit card interest, according to a recent survey of 1,862 people by The Ascent, a Motley Fool service that rates and reviews essential products for everyday money matters.
That study also revealed that more than one-third (38 percent) of survey respondents who have used a BNPL service wanted to make purchases that otherwise would not fit their budget. Fourteen percent said they use the service because their credit cards are maxed out.
Approximately one in five people using BNPL have missed a payment or incurred fees. The same amount thinks they will miss a payment in the next 12 months.
Respondents said they use BNPL to buy:
Pay in 4, which is part of PayPal’s growing suite of Pay Later solutions, enables merchants and partners to get paid upfront while enabling customers to pay for purchases between US$30 and $600 over a six-week period. payments are seamless with automatic re-payments. Pay in 4 will also appear in the customer’s PayPal wallet, so they can manage their payments in the PayPal app.
“In today’s challenging retail and economic environment, merchants are looking for trusted ways to help drive average order values and conversion, without taking on additional costs. At the same time, consumers are looking for more flexible and responsible ways to pay, especially online,” said Doug Bland, SVP, Global Credit at PayPal.
With Pay in 4, PayPal is building on its history as the originator in the buy now, pay later space, coupled with PayPal’s trust and ubiquity, to enable a responsible and flexible way for consumers to shop while providing merchants with a tool that helps drive sales, loyalty and customer choice, he explained.
Aside from interest-free credit, shoppers using BNPL plans receive several advantages. With more companies offering it as a payment option, the market for BNPL payment providers is growing and becoming more competitive, noted Solid Marketing’s Aramouny. This in turn increases the advantages that shoppers receive.
For example, the early BNPL programs typically required you to go through the process of setting up an additional account with a new bank for the amount of the debt, she explained. Nowadays, BNPL is much easier to access and can simply be done by filling out an online form.
“The ease of access to these programs now makes it a popular payment method for shoppers,” she noted.
Buy now pay later has exploded in popularity over the last few years due to a confluence of factors, according to Ben Parr, co-founder and president of Octane AI. Those factors include the sudden democratization of BNPL technology by companies like Afterpay, Klarna, and Affirm.
Other factors are a rapid rise in online shopping and a growing rejection of credit cards by millennials and Gen Z. This combination has created a perfect storm for the rise of BNPL, said Parr.
“For consumers, BNPL makes new purchases less daunting. It is harder to give up $100 all at once [versus] spending just $25 upfront. Psychologically, it makes big purchases easier to complete. BNPL also opens up new payment options for those who do not have credit cards,” he told the E-Commerce Times.
This payment option is less risky and intrusive than a typical store-brand credit card, with lots of hassles and massive fees associated with late payments or installment payments, according to Jonathan Treiber, co-founder and CEO of RevTrax.
A customer weighing the risks of a store credit card or standard association-branded credit card product against BNPL makes BNPL an easy decision, even if both carry the same weight with credit agencies and impact short-term credit ratings with a hard-inquiry. “BNPL has the same risks as any other credit products for customers who are inclined to overextend themselves,” he told the E-Commerce Times.
Buying a high-ticket item with a debit card is still the safest because the customer needs to have the cash in the bank to buy the item. Of course, consumers need the forethought to ensure they will not need that cash for something else, he added.
BNPL is a safe alternative to consumers over traditional credit and/or debit cards agreed Parr. It is very safe and widely accepted by thousands of retailers and direct-to-consumer brands.
“BNPL is well past the early adopter phase and is mainstream in many markets. It is a no-brainer for e-commerce brands to implement, and BNPL will be a major part of the future of consumer spending for a long time,” he said.
BNPL plans are merely newer versions of long-standing credit offerings, including lay-away offerings by big-box retailers. Stores encouraged customers to purchase inventory today but pay for it over time, especially around Christmas Holiday shopping periods, added Treiber.
Other than interest-free credit, BNPL has strong drawing power for some categories of consumers. That was reflected in The Ascent survey.
The fact that BNPL plans are not credit cards is a big draw. People have conflicting feelings about credit cards. Even when they do not, they may not be able to get approved for one, according to Dann Albright, financial research analyst at The Ascent.
“The COVID-19 pandemic may also be playing a role. We found that over a quarter of people who lost income due to the pandemic have taken out some sort of loan. BNPL is an easy way to increase buying power without going through a credit check or asking a family member to borrow money,” he told the E-Commerce Times. “We don’t have any specific stats on the pandemic and BNPL, but based on what we’ve seen, it wouldn’t surprise me if it showed up as a factor.”
Most of the survey respondents said they use BNPL services to avoid paying credit card interest. A close second was “To make purchases that otherwise wouldn’t fit in my budget.” That is a situation in which you might expect credit cards to be popular, noted Albright.
Over a third of Americans have used a BNPL service and the programs are continually expanding, he offered. Albright expects to see a much higher percentage of users the next time The Ascent asks that question.
“Especially with big names like PayPal getting into the business,” he added.
BNPL plans can be a good option for consumers hard-pressed for cash during the pandemic. But Albright urges caution in knowing the terms and considering other options.
“It can be a good alternative. But I’d caution people to make sure they know the terms and conditions on their BNPL, as well as to consider a credit card with an introductory zero percent APR to pay off their purchase over an even longer time without interest,” he said.
Finding out that 43 percent of people who have used a BNPL service say they completely understand the terms and conditions is a great start. Albright would prefer to see that number closer to 100 percent.
More than one-fifth of respondents to The Ascent survey said they had used BNPL to buy groceries, and almost 15 percent said they had used them to buy books, movies, music, or games.
So these services are not just for getting a new iPhone or making a big clothing purchase. It will be interesting to see how small these companies are willing to go, Albright wondered.
“Will consumers be able to BNPL a tank of gas? A cup of coffee? We will just have to wait and see, but I am excited to find out,” he quipped.
It’s no secret that robocalls, spam and call spoofing have all but destroyed Americans’ trust in telephone calls — to the point that many individuals have essentially stopped answering the phone. A widely cited Consumer Reports survey conducted in December 2018 suggests that 70 percent of U.S. adults will not respond if they do not recognize the number or if the caller’s number is anonymous.
This refusal to answer is certainly understandable from the consumer’s point of view (and we’re all consumers, after all), but it is costly for organizations that need to conduct business over the phone and have difficulty connecting with their customers.
It also represents a significant potential threat to public health and safety, as illustrated by health department’s contact tracers’ current challenges in getting individuals exposed to COVID-19 to pick up the phone. According to a Reuters investigation in August, more than three dozen public health departments were hindered largely due to some residents’ failure to answer their phones.
In March 2020, in response to growing consumer complaints and newly passed legislation to combat malicious robocalling and illegal spoofing, the Federal Communications Commission (FCC) mandated that service providers implement call authentication based on the STIR/SHAKEN framework, which authenticates caller identity via digital certificates, by June 2021.
Many carriers have already implemented the standards and are working with analytics partners to refine their algorithms to determine which calls are suspicious and deserve to be marked as spam or blocked entirely. These algorithms use STIR/SHAKEN attestation ratings (which are based on the originating service provider’s relationship to the telephone number) along with many other variables such as complaints and calling patterns.
The goal is, of course, to stop abusive and unwanted calls without hindering organizations’ ability to call consumers for valid reasons. But aggressive algorithms also introduce the risk that legitimate business calls may be mistakenly filtered out. In fact, many companies have seen their answer rates drop even further as their outbound calls are blocked or marked as spam.
So, what can businesses do to make sure their calls get through — and then encourage their customers to answer?
Following are seven steps that organizations can take to combat erroneous call blocking and increase answer rates. These measures will help businesses optimize contact operations, increase call performance, and protect and promote their brands by restoring trust in calls.
STEP 1. CENTRALIZATION: Validate Identity Across the Calling Environment
The first step to reestablishing trust in the phone channel is to make sure your company’s numbers and contact information have been validated across the calling environment. Organizations often have several phone numbers sourced from different service providers. All these details need to be kept up to date across service providers and phone carriers so every number from your business is validated and doesn’t wrongly show up on phone screens as spam or, worse, get blocked.
Start by validating each number across service providers and phone carriers so your organization is seen as the legitimate call originator for all your numbers.
STEP 2. CONTACT: Connect with confidence
Some calls fail to connect because the number on file is incorrect or the call is placed at a time when the customer is unlikely to answer. One way to effectively address these issues and improve right-party contact rates is to incorporate predictive phone behavior intelligence into your CRM system.
This means making sure customer contact information is up to date, including which number is most likely to be answered (prioritizing the customer’s preference for landline or mobile calls, for example) and what days and times to call to increase the likelihood of a response. These types of solutions have been shown to increase right-party contact rates for outbound calls by an average of 33 percent.
STEP 3. CONSISTENCY: Enable an accurate call display
When calling customers, most enterprises use many telephone numbers beyond the few main published contact numbers. However, these additional numbers — especially internal extensions and corporate mobile numbers — often display inconsistent, inaccurate, or even blank caller ID names due to variations across internal systems and processes. But, as noted above, customers are much less likely to answer if they aren’t sure who is calling.
Managing the way your company’s brand is displayed on outbound calls is critical to creating confidence in who is calling. Make sure the correct information is displayed, and measure call performance to see if certain caller names are more effective — and, if so, make adjustments to increase answer rates.
STEP 4. CONNECTION: Ensure that your outbound calls get through
Anti-robocall and anti-spoofing regulations, designed to protect consumers from unwanted and fraudulent telephone calls, have led service providers to implement measures that can mistakenly block legitimate business calls or flag them as spam. Many organizations do not even realize that their calls are being blocked or flagged until they receive negative feedback from their customers.
To make sure calls from your telephone numbers are being accurately assessed as legitimate business calls by service providers and caller ID apps, you should register all your numbers across the caller ID ecosystem of carriers and app providers. You will also need to understand your baseline call patterns (How are telephone numbers assigned to campaigns? Which carriers terminate your calls? Are call answer rates similar across carriers?) to identify any telephone numbers that are being wrongly blocked or flagged.
There is no central location to check which calls are being blocked, but you can perform regular test calls and monitor any changes to your registered telephone numbers’ reputation across carriers, which will allow you to respond promptly if calls are being incorrectly blocked or marked as spam. You will need to report any suspected inaccurate spam labels or mistaken blocking to the individual voice service (mobile, landline or VoIP) or app provider.
STEP 5. CERTAINTY: Protect your brand from abuse by spoofers
Fraudsters often use spoofed calls to impersonate legitimate businesses and swindle consumers or trick them into handing over personal information. If your business telephone numbers are being used by spoofers, the fraudulent calls can damage your brand reputation and destroy customer loyalty and trust. Depending on the applicable consumer protection legislation, spoofing may also expose you to fines or penalties for purportedly making unwanted calls.
To protect your brand’s reputation and your customers — and reduce your liability risk — you should monitor the use of your brand across the caller ID ecosystem. Designate inbound, outbound, or bidirectional telephone numbers, and register inbound-only numbers as do-not-originate (DNO) numbers across the ecosystem, to prevent fraudsters from using these numbers. Also monitor the assigned caller names for third-party numbers, so you can identify attempts to spoof your organization’s caller name.
STEP 6. CERTIFICATION: Authenticate the caller identity
Congress and the FCC have now mandated that voice service providers deploy STIR/SHAKEN call authentication by June 2021. By applying this digital certificate technology, carriers can notify recipients that a call has been verified using a symbol, a verification keyword, or another visual alert. If the call cannot be verified, the carrier may block the call and/or mark it as potential spam.
However, enterprise networks can introduce complications. When an enterprise acquires phone numbers from one carrier but originates calls on a different carrier’s network, the attestation level — essentially a confidence score indicating how reliably a carrier can identify the caller and source of the call — can take different values. The concern is that anything other than the highest level of attestation may not be accepted as trustworthy by consumers, or even downstream carriers.
To take control of how your calls will be signed and with what attestation level, make sure your call operations staff understand the impacts and limitations of the STIR/SHAKEN standards, verify your STIR/SHAKEN attestation levels, and integrate STIR/SHAKEN standards into your network and mobile applications. This will allow you to sign outbound calls, verify inbound calls and secure end-to-end calls.
STEP 7. CONTEXT: Enhance the mobile call display
Beyond providing an accurate calling name and number, most landline caller ID displays offer limited opportunity to add context. Mobile displays, however, are an entirely different matter. Smartphone users have become accustomed to a steadily improving digital customer experience — one that far outpaces the typical current call experience. Enterprises can enhance this experience by providing richer content on the mobile phone display, giving customers more reason to answer.
Beyond visually displaying the call authentication or verification result to increase customer confidence that the caller is legitimate, businesses can provide a customized brand display using logos, images and digital business cards to deliver expanded name information and the caller’s title, department and location, for example.
You can also add a targeted message — about the purpose of the call, for instance, or a URL to visit for more information — for a personalized brand experience. This enhanced context can be included in the call history to make sure customers see the information even for calls they don’t answer.
While digital communications are extremely popular among both businesses and customers (research suggests that customers often prefer to initiate contact via a web portal or email), everyone needs to speak with a real person sometimes.
The phone channel is frequently used at a more critical point in a relationship, such as when a complex issue escalates or in a high-priority interaction. Businesses regularly use voice calls for urgent or sensitive communications.
For enterprises, protecting and improving the customer experience, with the goal of boosting both customer retention and growth, is a key motivation for putting an end to robocalls and call spoofing.
Enabling organizations to reliably engage in high-value communications by phone — whether the dialing organization is a business nurturing an important client relationship, a health department tracing the contacts of a COVID patient, or a bank notifying a customer of attempted account fraud — will lead to both customer and operational business benefits.
Even more importantly, restoring trust in the phone is the first step in reenergizing a vital communication channel that, especially in today’s world, offers the next best option to being there.
The stampede from offices to working from home has strained IT security teams to their limits. As a result, SMBs find they need to get more bang for fewer bucks to fight off cybersecurity threats.
Network security firm Untangle on Sept. 8 released the results of its third annual SMB IT Security Report. Polling more than 500 SMBs, the report explores major barriers to managing IT security. The results reflect the growing challenges the pandemic caused in forcing massive shifts to remote work.
Nearly half of IT pros have altered their security plans as a result of large-scale breaches reported in the media. The report shows that IT teams, in addition to protecting their organizations from increasing cyberattack risks, must also contend with the unintended consequences of the coronavirus pandemic.
The survey revealed that as businesses consider more permanent plans for their employees, 56 percent will continue to have some employees work from home permanently. Another finding shows that 38 percent of SMBs allocate US$1,000 or less annually to their IT budget.
SMBs are proactively putting tools in place to combat attacks. They are able to limit their vulnerabilities even though they continue grappling with limited security budgets and resource constraints.
However, dealing with these challenges during a cross-industry WFH shift has created gaping vulnerabilities within their networks. This adds another challenge to already overburdened IT departments.
“As the abnormal becomes our new normal, SMBs need to approach remote work by using a combination of cloud-based applications and on-premises solutions to keep employees and systems safe and ensure business continuity,” said Scott Devens, CEO at Untangle.
SMBs should be looking for technologies that incorporate multilayered network security tools and hybrid network infrastructure, such as SD-WAN, to avoid large-scale network vulnerabilities, regardless of budget and resource size, he suggested.
This survey revealed a critical takeaway about the changing cybersecurity climate the pandemic thrust upon SMBs, warned Joseph Carson, chief security scientist and advisory CISO at Thycotic.
“The report is clear that SMBs do become victims of cyberattacks and that it is better to invest upfront rather than try to survive in a post-cybersecurity incident,” he told TechNewsWorld.
If SMBs stick to their tight budgeting restrictions for their IT departments, they could find that some of the $1,000 ceilings they put in place can be eaten up for cyber insurance.
Cowbell Cyber’s recent survey revealed that 65 percent of SMBs will spend more on cyber insurance in the next two years, according to Isabelle Dumont, the company’s vice president of market engagement.
“Subscribing to a standalone cyber policy is always a great step for SMBs to get financial protection against a wide range of cyber incidents and gain access to expert security resources when an incident actually occurs,” she told TechNewsWorld.
A growing number of SMBs continue to do more with less, according to the report. This year’s 38 percent budget adjustment noted above compares to 29 percent last year and 27 percent in 2018. Further, 78 percent of SMB employees are temporarily working remotely, with an anticipated 56 percent suggesting some positions will be permanently remote moving forward.
Nearly half (48 percent) of the surveyed organizations operate in more than two locations, making SD-WAN an ideal infrastructure. SD-WAN allows small businesses that are operating in multiple physical locations and using bandwidth-intensive applications, such as voice-over IP tools (VoIP), Zoom, or Salesforce, to take advantage of this technology.
Doing so allows SMBs to increase branch office network security. It also lets them increase Internet efficiency and decrease IT spending.
For nearly one-third (32 percent) of the responding SMBs, budget restrictions are their greatest barrier. That result is the same as last year.
Nearly one-quarter (24 percent) said their biggest challenge is employees who do not follow IT security guidelines. Limited time to research and understand emerging threats was the biggest cybersecurity protection barrier for only 13 percent of SMBs responding to the survey.
IT departments, even with limited resources, can implement foundational strategies to address network security issues and lay the groundwork for future investments, noted Untangle in citing some of the significant findings. The survey revealed effective strategies SMBs employ with their limited budgets.
For example, SMBs rank firewalls (82 percent), antivirus protection (57 percent), endpoint security (48 percent), archiving management and backup and VPN technologies (47 percent), and Web filtering (40 percent) as their most important features when considering which IT security solutions to purchase.
A majority of SMBs find economical solutions in the cloud. For instance, SMBs have adopted a hybrid on-premises/cloud-based IT infrastructure for business applications. A solid majority (71 percent) have their firewall on-site rather than in the cloud.
Nearly half (45 percent) of SMBs said they have adjusted or reevaluated their IT security roadmap based on recent security breaches and ransomware attacks. Of those SMBs surveyed who experienced a data breach within the last 12 months, 15 percent were able to stop the attack or any unauthorized access before sensitive data was extracted.
This year, Untangle asked SMBs to rank the features they consider important when purchasing or considering an IT security solution, according to Heather Paunet, vice president of product management at Untangle. One of the lower-ranking options was identity access and management.
“This is especially important now as employees may either be in the office, working remotely or a combination of both. Having identity access and management solutions, such as Directory Access or Captive Portal, can help IT teams ensure that those who are logging into the network have the correct credentials to do so,” she told TechNewsWorld.
This ranking mirrors another finding by Varonis in their 2019 Global Data Risk Report, which noted that 53 percent of companies have over 1,000 sensitive files open to every employee in the company.
“As an SMB, many files should be segmented based on employee department or credentials, so it is even more important to have a verified identity access system in place,” she explained.
One of the most startling findings in Untangle’s SMB security report is that employees’ actions have become the second-highest-ranked barrier to cybersecurity for SMBs. In its 2019 SMB IT Survey, employees’ behavior ranked as the third-highest barrier, and in 2020, they have become number two.
“This is dangerous because, many times, employees are the frontline to preventing a cyberattack. If employees are not following IT security guidelines, especially with simple things like VPN connectivity, identifying emails that look suspicious, or malicious links that lead employees to a fraudulent website, then that means other protocols are falling to the wayside,” added Paunet.
For any SMB looking to create a multi-layered security solution, including employees as a foundational pillar of cybersecurity is necessary, she asserted.
One additional observation Paunet noticed in the SMB security analysis was the pace of new technology adoption has slowed down this year compared to last year. The number of SMBs who are deploying their firewalls in the cloud has decreased from 2019 to 2020.
“With SMBs relying more on cloud-based applications such as Salesforce, Slack, G Suite, and Microsoft 365, it is interesting to see their cloud-based firewall deployments decrease. It is uncertain whether the current focus on pandemic restructuring or business limitations have delayed this technology adoption, but the decrease is noticeable,” she cautioned.
Cybersecurity skimping starts with an organization having an incomplete picture of the organization’s IT footprint, noted Cowbell Cyber’s Dumont. That can lead to severe security blind spots.
Getting a better understanding of security priorities should not mean needing to hire a security consultant, suggested Mark Kedgley, CTO at New Net Technologies (NNT). Plenty of effective cybersecurity controls should be adopted.
“Many of these do not necessarily need to eat into IT budgets,” he said.
For example, establishing a hardened build standard will provide protection against the attacks highlighted, like phishing and ransomware. Hardened, secure configuration guidance is available for free from NNT and the Center for Internet Security.
Vulnerability scanning and patching can also be done on the cheap, he added. Some vendors, including Greenbone Networks, still offer a free vulnerability scanner via the Greenbone Community Edition.
Finally, DDoS protection can be overlaid on any website using Cloudflare’s Free Plan, Kedgley suggested.
SMBs are mostly leveraging free, built-in security solutions that come included with existing solutions rather than investing in dedicated security solutions, according to Thycotic’s Carson.
“This means that they are running blind when it comes to threat intelligence with the hope that they will be lucky and avoid becoming a victim of a cyberattack. They use the ‘do just enough’ approach because resources are limited, and there is never enough time to spend on security,” he told TechNewsWorld.
Untangle’s Paunet recommends that the minimum IT protocols that SMBs should deploy are credential-based VPN connectivity. They also need a next-generation firewall.
With credential-based authentication, SMBs, no matter how small, can connect to the network with a secured link via VPN and then consistently remind employees to update their credentials. That leaves them less susceptible to cybercriminals, she explained.
A next-generation firewall, with advanced web filtering and virus protection, can then provide layered security for the incoming and outgoing Internet traffic, noted Paunet.
Cowbell Cyber’s Dumont suggested multi-factor authentication (MFA) for all administrative accounts and for email is a must.
“It is free and takes seconds to set up, especially on cloud services. Many other security resources for SMBs are free,” said Dumont.
Besides firewalls, NNT’s Kedgley added the need for antivirus, backups, and web filtering. He said that the must-have list should include regular vulnerability scanning and patching, together with configuration hardening. He said also essential are non-negotiable security practices for every size of the organization.
“SMBs should invest in strong Identity and Access Management solutions as they not only help reduce the risks from unauthorized access, they also help SMBs scale better when they grow,” said Thycotic’s Carson in rounding out the minimum required security measures for SMBs.
Automated purchasing bots, also known as “sneaker bots,” “click bots,” “Instacart bots,” and other names, are ruining the online shopping and gig economy experience for both consumers and workers. These bots can cause considerable damage to a mobile business’ reputation and bottom line.
As their namesake indicates, these bots were originally developed to automate the purchase of sneakers, enabling collectors and hoarders (who will resell them at a 10x or more markup) to buy mass quantities of the latest releases and squeeze out ordinary customers. As a result, for example, when Nike releases a new shoe, it can be almost impossible for individuals to beat the bots and purchase a pair for themselves online.
But these automated transaction bots are now used for far more than just sneakers. Airlines, e-commerce, events sites, and even rideshare companies all suffer from bots that scrape information and hoard products, damaging the targeted company’s brand and making it difficult for consumers to buy goods and services.
These bots are easy to get. Both the Apple App Store and Google Play provide them for downloading, along with many other websites. For example, Instacart bots are third-party apps that run alongside the legitimate Instacart app and claim the best orders immediately as they are posted on the app, making it practically impossible for human shoppers to get access to the most lucrative orders.
The problem is growing. According to Imperva, bad bots made up nearly a quarter of overall website traffic in 2019. Although laptops can certainly run bots, apps are where the action is. Pew Research Center reports that 74 percent of households own a computer, and 84 percent have a smartphone. But when it comes to usage, mobile dominates. More than half of worldwide Internet traffic last year came from mobile devices, and U.S. consumers spent about 40 percent more time using their smartphones than they did their desktops and laptops.
An ounce of prevention is worth a pound of cure. E-tailers can and should take a number of measures to protect their mobile apps from sneaker bot apps.
For starters, they can protect their apps so that the developers of automated transactions, or auto-clicker bots, can’t install the malicious app on the same device as the good app. They can also prevent the good app from being reverse-engineered, a process that allows the bot developer to understand how or where to insert the bot.
Standard security methods such as app shielding, app hardening, preventing emulators and simulators, preventing debugging, preventing overlays, obfuscation, and targeted encryption can prevent the development or usefulness of sneaker bots that target a specific app. Likewise, preventing a mobile app from running on rooted or jailbroken phones can also slow down or stop sneaker bots from carrying out their predesigned ends.
The goal of adding generalized security protections inside the good mobile app is to block common pathways that sneaker bot apps and auto-clicking apps need to function. Other general methods, such as obfuscation and app shielding, a set of processes used to block tampering running programs on behalf of the good app, make it extremely hard for developers of sneaker bots to know when or how to click and execute actions on behalf of the app.
These methods can be added to the next release of the mobile app to prevent the creation and stop the usefulness of sneaker bots.
At this point, you may think, “Yes, but what if I already released my app without these protections?” In other words, what if hackers already understand the ordering process inside the app and built a sneaker bot or auto-clicker to take advantage of it? Also, to make it more complicated, “What if I have no intention of changing the way my app functions?”
Generally speaking, if there is a sneaker bot, Instacart bot, or similar app used to generate automatic actions against or “inside” your app from the same device, it’s a pretty good guess that the good mobile app lacked the protections necessary to block the creation of the bot in the first place.
Adding new methods like obfuscation and app shielding, methods designed to block static and dynamic analysis in a new app, won’t help the existing app (i.e., the app on the devices in the hands of your users) block the existing bot. The bot is out there, and the app is out there, and the bot is made to function with the currently published app.
The only thing you may be able to do to protect the existing app from an existing bot operating on the same device — assuming no other changes to the existing app — is to update the app backend, using techniques such as rate-limiting purchases. However, this has limited usefulness if, say, your app is an on-demand delivery app. How could you guarantee that real purchasers aren’t the ones simply buying and clicking more? You don’t want to block legitimate purchase actions in your app.
So, what can you do?
Obfuscation by itself is of little use since the developer of the good app isn’t going to change how the app functions and the developer of the sneaker bot already understands how the app works and has built the malicious bot to take advantage of it.
Nevertheless, depending on the strength of the solution, methods such as app shielding and hardening, jailbreak and root prevention, antitampering, and other methods can provide an effective defense inside an existing app to an existing bot. So, follow the advice above and release a new app as quickly as possible.
Can you go deeper? Of course, you can.
The key is to understand the methods used in the bot, i.e., understand what you’re “blocking” and what you’re “protecting” against inside your app.
For example, the bot may gain or require root access on the device to function. Or, it may require an overlay, mirroring, keylogger, or other method. It may rely on memory injection, a malicious program running in the background, or need to be installed from unknown sources.
There are literally hundreds of methods well-designed sneaker bots use to carry out their ends. Don’t rely on scanning for bundle IDs to block these bots. Bundle IDs can be easily changed, and some sneaker bots and practically every form of malware change bundle IDs automatically. Besides, scanning for bundle IDs is like whack-a-mole: too much effort for too little impact.
The best practice here is to meet the threat by zeroing in on the methods used by the sneaker bot to infiltrate your app’s processes. You may need to engage your or an external security research team to understand the particular sneaker bot plaguing your business, but it’s doable.
Note: some of these sneaker bots protect themselves with the same methods, too. Still, it’s entirely achievable to block sneaker bots from destroying your business without complex systems and back-end upgrades. Don’t hesitate — the answer can be in your app.
Computer systems design and related services added 13,000 jobs, according to the U.S. Department of Labor’s August jobs report.
Technology-related jobs figures for August are not yet available, but net IT employment in July was up by more than 203,000 positions since the COVID-19 outbreak, and there were more than 235,000 job postings by U.S. employers, according to the Computing Technology Industry Association (CompTIA).
CompTIA said the top five roles with openings in July were software and application developers, IT support specialists, systems engineers and architects, systems analysts, and IT project managers.
The highest number of job postings by industry sector were professional, scientific, and technical services; finance and insurance; manufacturing; information; and the retail trade.
With the pandemic having forced enterprises to let their staff work from home, the emphasis is shifting to cloud-based solutions, remote tech services, and security, Ray Wang, a principal analyst at Constellation Research, told TechNewsWorld.
“We’re seeing a skillset shift away from hardware and network engineers to software, cloud, and artificial intelligence,” Wang said. “Digital skills are also important.”
Skills for the cloud that will be in demand are cloud engineering, development, integration, and hybrid cloud management, according to Wang, who added that AI skills in demand are algorithmic library development, machine learning expertise, and the development of AI and learning models.
Cybersecurity experts, cybersecurity command center operators, and threat analysts will also be in demand.
“This is not industry-specific,” Wang pointed out. “We see this demand across industries, though financial services and the public sector may have a good number of people in cybersecurity.”
The public sector “is less on the cloud than other industries, and AI is a competitive differentiator for all industries,” Wang said.
“As we look to the future, artificial intelligence has significant potential to disrupt the world,” Congressman John Yarmuth (D-KY), Chairman of the House Budget Committee, stated at a Sept. 10 virtual hearing on the impact of AI on the workforce.
AI “presents opportunities to improve lives, livelihoods, productivity, and equality,” Yarmuth said. “However, it also poses serious risks of large-scale economic changes.”
Like the arrival of the steam engine, electricity, and computers, AI will reshape a broad swath of industries and jobs, but old jobs will be eliminated, and some workers will be left behind, Yarmuth observed.
Some areas in which AI might play a role are smart cities, smart buildings, autonomous vehicles, medical research, disease diagnosis, various areas of scientific research, sales and marketing, retail, and the military, which is funding research into how human intelligence analysts can work with AI.
“Artificial intelligence and blockchain are two key markets in IT that are expected to have continued year-over-year growth,” Arran Stewart, Co-Founder and Chief Visionary Officer of Job.com, told TechNewsWorld.
With AI predicted to have a compound annual growth rate (CAGR) of over 42 percent up to 2027 and blockchain a CAGR of over 67 percent up to 2025, these two areas “represent the biggest areas of growth in the IT space with over US$1 trillion in market value,” Stewart said.
There will be increased demand for data scientists, programmers, and blockchain specialist programmers for the next three years, he predicted.
Other areas are logistics, especially in the autonomous car and delivery sectors “due to increased investment into the use of AI and machine learning to innovate, improve and renew the realm of transportation,” noted Stewart.
“There’s also been a big shift in financial technology (Fintech) and privacy towards a blockchain future, so it’s likely that these industries will absorb a larger portion of talent in the next decade.”
Austin, Texas., Atlanta, Ga., and Raleigh, N.C., are the top three cities that will see the greatest number of postings for high-tech jobs that are in demand for the next three to five years, Stewart said.
“We’ve seen strong growth in terms of open job postings in tech in these cities over the last several years, and their traction doesn’t seem to be stalling at all.”
Other areas that high-tech workers want to move to, according to Constellation’s Wang, are in Washington State around Seattle and Vancouver; Las Vegas, Lake Tahoe, and Reno, in Nevada; Frisco, Tx., near Dallas; Nashville, Tenn.; Boise, Idaho; and Boulder, Colo. Florida is also high on the list.
The shift to WFH “will likely see an increased exodus to other less expensive but similarly appointed locales,” Job.com’s Stewart predicted.
Technology’s fall selling season is gearing up for year-end as it always does, coronavirus or not, and the CRM industry follows suit with some mods.
The majors like Salesforce and Oracle, as well as fast followers like Zoho, are in hot pursuit of what’s new — and they’re betting new in this context means a process orientation, not simply delivering new products, features, or functions.
To be sure there’s some of that, but it’s all wrapped in process because process is what we turn to late in a tech trend. CRM is about 25 years old, give or take, so process is a logical thing.
Take Salesforce for instance. They’ve spent the year, at least since COVID-19 emerged as the primary driver in February, developing and deploying solutions that were not likely on their roadmap.
Work.com and Salesforce Anywhere are great examples of a focus on processes that either didn’t exist 12 months ago or that have been greatly revamped for the work-at-homers.
Oracle has a ton of new stuff in the offing. I’ve had some discussions and the briefings are coming at the end of the month. I can’t talk about specific products but the Q1 earnings report delivered in the last week show a company hitting stride, making money and taking names.
The stock rises even as financial analysts who were once skeptical find new ways of stating the obvious: Oracle is finally re-emerging as a cloud company. But while its numbers all look good, migrating its large customer base from on-premise to the cloud is risky. When a customer declares a jump ball, it means all relationships are up for review.
A jump ball can be bad even for apparent winners. For instance, this piece from CRN tells a story of an OEM poaching its partners’ deals leaving them with expensive costs of sales and nothing to show for the effort. I am sure this set PRM back a few years because it evaporated the trust vendors must have to operate a channel.
Then there’s Zoho — and you need to think about them. They’re pigeonholed in the SMB space for the moment, but we’ve too often seen that space is really the catbird seat allowing plenty of room for a move up market that Clayton Christenson well documented.
Zoho has in excess of 45 million customers around the globe; and though they disproportionately represent the SMBs, they have a platform that enables users to glue together their more than 45 modules into exact fit solutions.
The thing that makes rapid iteration possible and thus moves up market is a vendor’s platform. The better it is at generating the code that links modules, the more versatile it is, and the more likely it is to keep business processes in synch with market realities.
That message is brought home by two studies I completed this year. Each gave a surprising data set that would warm any enterprise software vendor’s heart — even in this season ravaged by upheaval.
The consensus among rank and file users is that the software they are required to use to deal with customers is insufficient. The end users I studied largely cobble together point solutions using social media, cell phones, CRM and email, rather than accessing integrated systems that can tell them the next best thing to offer or do.
As a result, many people are running around and working harder than they should, with the kicker that they’re leaving money on the table. Working at home only makes these conditions worse.
So, platform is the new standard equipment that smart buyers will seek when looking for a new rig. Of course, platform alone won’t solve all problems. There is still, and for a long time to come there will be, a solid case for out-of-the-box functionality of the type that companies like Veeva and Vlocity (now a part of Salesforce) specialize in.
But even here the question savvy buyers will still have boils down to how easy is it to change the elaborate vertical industry solutions — and that reduces to how robust is the platform you’re built on?
In the 20th century we had the Roaring Twenties; and it looks like this time it might be the Homer Twenties or maybe the Calamitous Twenties: something like that.
Who will be our F. Scott Fitzgerald? What would The Great Gatsby look like now? A story about an entrepreneur with issues stemming from multiple news cycles trying to keep up by leveraging the platform his or her business lives on?
That might be a good bet.
A proposal to avoid the banning of the popular social media app TikTok was submitted to the U.S. Treasury Department over the weekend.
The plan submitted by ByteDance, which owns TikTok, calls for the company to enlist Oracle as a “trusted technology provider” in order to address national security concerns raised about the video-sharing software by the Trump administration.
In August, President Trump issued an executive order barring U.S. businesses from doing business with ByteDance after Sept. 15.
Although details of the deal haven’t been released, it’s been reported that Oracle will be handling the data for TikTok’s 100 million American users. How much of the operations side of the business will remain with ByteDance remains unclear.
“This is real win for ByteDance,” said Jack E. Gold, founder and principal analyst of J.Gold Associates in Northborough, Mass.
“ByteDance thought it was going to have to sell TikTok or they were going to be put out business in the U.S.,” he told the E-Commerce Times. “Now they get to keep their IP and their user base and use Oracle as a data center for American data.”
“The deal will pad the wallets of the company’s major shareholders,” added Charles King, principal analyst at Pund-IT in Hayward, Calif.
“More importantly,” he told the E-Commerce Times, “it should end or subdue the potshots the company has suffered from President Trump and other critics.
A partnership with ByteDance would benefit Oracle, too.
“Oracle is frustrated at being behind the global top four hyperscalers in public cloud revenue (Amazon Web Services, Microsoft Azure, Alibaba Cloud, and Google Cloud) and has been vying with IBM to grow its cloud in two dimensions at once: expand its penetration in traditional enterprise and prove its cloud platform’s scalability and “hip factor” with well-known brands like Zoom,” wrote Forrester Vice President and Senior Analyst Jeff Pollard in a blog published Monday.
“Nothing is more hip than TikTok at the moment, and TikTok has 800 million monthly active users globally, putting a check mark by both of Oracle’s goals,” he noted.
If the TikTok deal is approved, it would finally give Oracle a seat at the consumer tech table, added Chris Emme, chief revenue officer of Tsu, a social media platform based in Norwalk, Conn.
Oracle will be part of the “fun tech” conversations, he continued, part of FAANG — which will now need to change its name — Facebook, Amazon, Alibaba, Netflix and Google .
“More challenging for that group than finding a new name will be the immediate entry of a new competitor,” he told the E-Commerce Times.
In choosing to hook up with Oracle, ByteDance spurned the advances of other suitors, most notably Microsoft and Walmart.
Emme maintained that a deal with Microsoft might have made more sense than the one with Oracle.
“It would have been incredibly valuable for Microsoft,” he explained. “It would have given them access to talent for content creation and a link to a young audience for media.”
“For Walmart,” he continued, “it put them one click away from facilitating transaction of products discovered by users on social media.”
Pund-IT’s King added that Microsoft has significant experience in consumer and entertainment markets that would have been applicable to managing TikTok. “TikTok is unlike any other Oracle business, and it’s unclear how and how well the company and its brand will fare under Oracle,” he said.
However, the Microsoft deal was a buyout, which, apparently, something ByteDance wanted to avoid. “This arrangement keeps TikTok intact,” Gold observed. “Oracle isn’t buying anything. TikTok is using the Oracle cloud.”
All of ByteDance’s wheeling and dealing has been forced by national security concerns about the app.
“TikTok is much like other apps — there’s the potential for its sharing users’ personal info with China’s government,” explained Chlo Messdaghi, vice president of strategy at Point3 Security, a provider of training and analytic tools to the security industry, in Baltimore, Md.
“Even though the TikTok developers claimed they weren’t sharing data with the Chinese government and continually stressed that all servers were based in the U.S., the problem is that a government can enforce such sharing at any time if they’re so inclined,” she told the E-Commerce Times.
“We don’t have any evidence this actually happened,” she continued, “but that is why governmental workers were warned not to put the app on their phones. Protesters in Hong Kong were similarly warned.”
Erich Kron, a security awareness advocate at KnowBe4, a security awareness training provider, in Clearwater, Fla. noted the threat to consumer data posed by TikTok is relatively minimal. “However,” he told the E-Commerce Times, “for people that are employed by the government or military and are using these apps, the issues this sort of tracking and information collecting create could be significant and could pose a real threat to operational security.”
“While we don’t know the details behind the partnership between Oracle and TikTok, this will at least put an end to the proposed ban,” he added, “and by partnering with a U.S. organization, who will hopefully be able to better vet the activities of the application with the mind to protecting data, it may significantly reduce the threat of information and data theft and the influence of the Chinese government.”
Although TikTok’s target audience is a younger demographic, it’s not just about kid videos, observed Jamil Jaffer, senior vice president of partnerships and strategy at IronNet, network security company, in Mclean, Va.
“Like a lot of companies, they’ve been caught gathering data without telling users about it,” he told the E-Commerce Times. “They also gather data about the videos they stream. Who is a person talking to? Who are their friends? Who is in their family group? How do they behave in their videos? What are their frequent locations?”
“There’s a lot of data there,” he continued. “When you take that data and put it in the hands of a potential adversary, that data can be used not only against a person in the future, but it can be used to train artificial intelligence algorithms to better predict behavior going forward.”
“Videos of kids dancing doesn’t seem that problematic,” he said. “but the way the data is gathered and the uses to which that data might be put can be very significant and have a real impact on national security.”
“It’s not clear to me that the Oracle partnership will address the very real national security problems that the U.S. government has identified,” he added. “We need to know more, but as of right now, color me skeptical.”
E-commerce is experiencing rapid growth with no sign of slowing down. Retailers and brands are finding that the new normal in retail and e-tail marketing is much like trying to hit a moving target. They have to take a refined aim and build in some lead time.
This marketing strategy requires businesses to adjust their digital infrastructure and tactics. Otherwise, they will miss the target as consumers prepare for their holiday marketing and ad campaigns.
Data from the U.S. Census Bureau shows e-commerce retail sales in Q2 were up 44.5 percent from 2019. Other reports show U.S. online sales were up nearly 80 percent for June year over year.
Retailers are facing an unprecedented amount of engagement, evidenced by data from fraud prevention company Forter’s Global Merchant Network of 750 million users, which showed a surge in online transactions in April and May.
Apparel and accessories saw a 99 percent increase in transaction volume, as well as three-to-four times the normal rate of gift card purchases. Unfortunately, this boom was also accompanied by a surge in fraud. Overall fraud activity increased roughly 30 percent from March 1 to May 15, Michael Reitblat, Forter’s CEO, told the E-Commerce Times
E-commerce sites can continue the momentum gained from COVID-19 once the pandemic subsides. But no universal formula for doing so exists. Much of their ongoing marketing success is dependent on the industry; according to Lil Roberts, CEO and founder at Xendoo, a cloud-based bookkeeping and accounting service focused on small business owners.
“Some industries are growing wildly, while others will never be the same again. E-commerce, home services, and technology companies are thriving as they’re adapting to the restrictions, helping combat the pandemic, and proving to be a necessity to consumers and businesses. Hospitality and certain professional services, however, are struggling due to travel restrictions and social distancing regulations,” she told the E-Commerce Times.
The boost in e-commerce sales is not without its challenges, however, suggested Evan Kohn, chief business officer at Pypestream, an automation and AI customer experience firm. For brands that have not prioritized digital transformation, this is a rough wake-up call.
“Not only do brands need a solid technology foundation to handle the influx in sales, but they also must dedicate resources to creating a world-class customer experience to keep their shoppers happy, informed, and loyal,” he told the E-Commerce Times.
The main obstacle retailers face now is ensuring the continuation of the supply chain, from procurement all the way to delivery, urged Roberts. The strains currently happening with the USPS will affect delivery on both sides of the supply chain.
“Even if a supplier does not use USPS, other delivery carriers are being pushed to the limit and may be impacted, even if indirectly,” she said.
Supply chains, manufacturing, and delivery of products have quickly adapted to the new normal. However, while retail sales models are being reinvented through e-commerce, the high rates of unemployment will strain retail consumer budgets, warned Diaz Nesamoney, CEO of digital marketing firm Jivox.
Consumer behaviors have changed significantly, partly due to their fear of going outdoors to stores and malls and partly due to restrictions by state and local government in how commerce can be conducted, he noted.
“Given how long the pandemic has lasted, several of these behaviors have become permanent, and so brands need to respond by investing in, and embracing, digital sales and marketing as online buying has grown exponentially,” Nesamoney told the E-Commerce Times.
This demands one-to-one personalized messaging. It also requires advertising that emphasizes specific and relevant products and where and how to buy these products digitally. This goes beyond one-size-fits-all advertising, he added.
Large traditional brands that do not invest quickly and aggressively in one-to-one e-commerce marketing stand to lose market share to their D-To-Customer competitors. Those competitors are typically digital natives, have strong e-commerce offerings, and excel in e-commerce marketing, Nesamoney said.
On the other hand, he noted, smaller DTC brands who have had very little competition from larger brands due to their over-reliance on brick-and-mortar distribution now have to stay ahead with investments in technology. That will enable them to stay ahead despite much larger e-commerce marketing budgets that are flowing into the market from the large brands.
“The race for e-commerce market share is on,” he said.
During the height of COVID-19, 20-to-25 percent of transactions came from new online users. This means that merchants are dealing with customers they have never seen before, according to Forter’s Reitblatt.
“To capture more revenue by ensuring they are not declining legitimate customers and providing consumers with a good experience, merchants need access to data that will help them identify legitimate customers from fraudsters and process transactions quickly,” he said.
Retailers who have invested in digital transformation have been — and will continue to be — more able to adapt quickly to new market opportunities, Reitblatt observed. This will take market share from competitors who are less digitally oriented.
“It is likely that these companies will sustain growth through retaining existing customers while acquiring new customers.”
Consumers are now more comfortable with e-commerce. So the ability to keep customers coming back will be what sets merchants apart from one another, he added.
“Promos and extended returns policies have a role to play, but at the end of the day, customers are looking for a seamless experience across all points of the online purchasing journey. Making it easy for them to find, buy, and receive their goods in a timely manner will be critical,” Reitblatt emphasized.
Indeed, this is an unparalleled point in time for e-commerce sites. With the rush of the supply chain being online, e-commerce companies have been able to acquire new customers at a high volume during this time.
By marketing and presenting buying opportunities to their newly acquired customers, momentum can continue moving forward, according to Xendoo’s Roberts. To maintain momentum, sites should continue to connect with their buyers and audience. They need to gather feedback, see what promotions or items their buyers are looking for, and try to deliver, she recommended.
Another approach more digitally-savvy brands use to continue e-commerce sales flourishing is finding ways to expedite shipping to maintain a positive customer experience, noted Reitblatt.
When delivery from third-party retailers is delayed, being able to process purchases and get product shipped within two to three days on your own site will establish a stronger relationship with consumers that keeps them coming back, he said. Other merchants are pivoting to offer new lines of products that are more in tune with current consumer requirements, behaviors, and preferences.
“It’s really about meeting and exceeding customer expectations,” he said.
Email needs to be front and center within every retail and e-commerce marketing mix, according to Melissa Sargeant, CMO of Litmus. That is how to effectively create more authentic human-to-human connections and experiences with customers because they expect brands to know what they want.
“This stresses the importance of brands gathering as many insights about their target audience through email, to then use to inform other channels,” she told the E-Commerce Times.
If marketers neglect this part of the marketing process, their multichannel marketing plan will miss the mark. Instead, they need to invest in the audience insights garnered via email to inform the rest of the brand’s marketing strategy. Then they will know how to maximize their efficiency and budget, Sargeant explained.
Email is here to stay. The ROI of email is unparalleled and with more shoppers making online purchases, retailers are going to be chomping at the bit to press send on their holiday campaigns.
“However, brands need to focus on making truly authentic connections through marketing efforts for them to stand out in the crowd at a time when the best way to reach consumers is digitally. Retail marketers must rely on email to drive target audience insights and the sales they need,” she said.
The U.S. Commerce Department is attempting to negotiate an agreement that would help thousands of U.S. companies comply with policies designed to protect the personal privacy of European citizens. The department, and the European Commission, an arm of the European Union (EU), have initiated discussions to resolve privacy issues raised by the EU, according to an August 10 joint statement.
The reason for the negotiations is that “Privacy Shield,” a Commerce Department program designed to protect the privacy of Europeans, has fallen apart. As a result of a legal challenge brought by Austrian privacy advocate Maximillian Schrems, an EU court ruled on July 16, 2020, that the U.S. Privacy Shield program was “invalid” because it failed to provide the requisite protection for European citizens.
Until the issues are resolved, U.S. companies will be operating in a twilight zone over how to ensure the privacy of personal data they collect and process electronically from European sources. More than 5,000 companies participate in Privacy Shield, and most of them are small or medium sized businesses.
The commercial impact of the EU decision is significant.
“Cross-border data flows between the U.S. and Europe are the largest in the world and are fundamental to the largest trading relationship in the world, valued at approximately 1.3 trillion U.S. dollars annually,” according to a joint statement issued by the U.S. Chamber of Commerce and several e-commerce associations. The termination of Privacy Shield has “disrupted these transatlantic data flows” and has created “legal uncertainty” for Privacy Shield participants, the groups said.
“Data flows are essential not just to tech companies — but to businesses of all sizes in every sector,” said U.S. Secretary of Commerce Wilbur Ross.
At first glance, Privacy Shield appears to be a substantive legal framework. In reality, the relationship between the U.S. and European Economic Area (EEA) countries regarding privacy has been in a fragile state for years. The EU court decision marked the second time in five years that a U.S.-Europe privacy framework had unraveled. A prior agreement, called the Safe Harbor Act, failed in 2015.
In general, EEA countries subscribing to the EU General Data Protection Regulation (GDPR) insist that countries outside of the EU provide a similar level of protection for personal data as that provided within the EU.
Under GDPR protocols, several types of compliance are permitted for the transfer of EU data outside the EU, according to an analysis provided to the E-Commerce Times from the Better Business Bureau National Programs office. Privacy Shield enabled U.S. companies to meet one of these, based on what is known as an “adequacy determination,” which is a decision by an EU regulator that a non-EU country’s privacy laws are sufficiently robust to meet EU standards.
By signing up under this single vehicle and implementing the required privacy practices, U.S. businesses were able to process the data of EU consumers in the United States. Also, Privacy Shield differed from an alternative mechanism, known as Standard Contractual Clauses (or SCC), in that Privacy Shield provided additional transparency and accountability requirements. Privacy Shield was also a broader compliance mechanism than a contract between two businesses, the analysis noted.
The stumbling block between Europe and the U.S. was outlined by the EU Court. Europeans claim that U.S. law fails to provide European citizens the same level of due process protection as U.S. citizens regarding personal data that could be obtained by U.S. national security and law enforcement agencies.
The result is that U.S. companies are caught in a crossfire between governmental entities. The European decision to invalidate the Privacy Shield “focuses not on commercial uses of data, but on concerns over potential government access,” said U.S. Chamber of Commerce executive vice president Myron Brilliant.
While government entities try to work out a solution, U.S. companies will have to deal with meeting GDPR standards as best they can. It will not be easy.
One option for U.S. companies is to use data “localization” measures. These are “regulations requiring companies to store and process data on servers physically located within national borders,” according to Albright Stonebridge Group.
A second option is for U.S. companies is to fall back on SCC agreements. But the EU decision made it more difficult to craft appropriate SCCs. Rather than use somewhat general legal templates, such agreements will now have to be much more specific depending on individual country requirements and the nature and use of collected data.
The EU decision contained “significant additional burdens,” for U.S. companies regarding both options, according to Lisa Soto, a partner at Hunton Andrews Kurth.
“The only sure bet is complete localization of data in the EEA. That is economically infeasible for most companies, so they are scrambling now to put in place alternate solutions for data transfers if they were relying on Privacy Shield certifications to legalize transfers,” Soto told the E-Commerce Times.
“If companies were relying on SCCs, they now need to conduct a transfer risk assessment and potentially put additional safeguards in place. To say this is a mess is an understatement,” she added.
Some legal experts contend that better encryption will help U.S. companies, and that the concern about national security agency access to data is somewhat constrained by U.S. law. The EU court decision has been rigorously examined by legal experts, with carefully nuanced analyses and interpretation of the ruling. But that underscores the notion that drafting SCCs puts a significant legal and compliance burden on companies.
Making matters even more risky for U.S. companies is the contention that the EU court “cast doubt” on the use of SCCs, according to the BBB National Programs analysis. In fact, a few European regulators, known as Data Protection Authorities (DPAs), have already voiced concerns about the viability of SCCs.
“Uncertainty will be the norm for data transfers between the EU and the U.S. until European regulators clarify the standards introduced by the EU Court. There is also additional uncertainty for data transfers from the UK to the U.S. because Brexit goes into full effect at the end of the year,” said Cobun Zweifel-Keegan, deputy director, Privacy Initiatives for BBB National Programs.
“The state of play after the Schrems decision is that all transfer mechanisms recognized under EU law now require additional legal, operational, and technical steps in order to even have a chance at being sufficient under the new standards,” he told the E-Commerce Times. “Until there is further clarity, businesses will continue to work to demonstrate their compliance to the best of their abilities, including by implementing the types of practices required by Privacy Shield,” he added.
While negotiations between the U.S. and Europe continue, the DoC will keep operating Privacy Shield in hopes that discussions will result in workable modifications to the program. Any of the companies in the program can drop out, but that’s not advisable, according to Soto, of Hunton Andrews Kurth.
“The Privacy Shield principles continue to serve as a strong framework for the protection of personal data. In addition, Switzerland continues to honor the Shield framework. Thus, it makes sense for companies to remain certified to the Shield.
“Of course, the hope is that diplomatic discussions will prove successful, and companies that are Shield certified ultimately will be able to again use the Shield as a mechanism by which to legally transfer personal date from the EEA to the U.S.,” Soto noted.
The Q4 shopping season, stretching from October until the New Year, has long been the most crucial and lucrative time of the year for retailers worldwide. This was never more true than in 2019, which found itself flaunting the distinction of being the first-ever trillion-dollar holiday shopping season.
This year, with all of the uncertainty surrounding the global pandemic, many consumer markets fear steep declines in in-person shopping, thus leading to a potential downtick in sales. This may seem daunting, but it should also serve as ample inspiration to develop a Q4 retail strategy well in advance.
Reduced foot traffic for in-store retailers may hamper the overall sales numbers posted in 2019. However, the rise in online shoppers — a 25 percent increase compared to last year — offers e-commerce retailers a pivotal opportunity to refocus their Q4 retail strategies. While consumer habits and trends may have shifted, the critical methods of attracting new and returning customers remain consistent.
Here are a few top strategies to adopt as we look ahead to this year’s holiday shopping season.
With the U.S. currently facing economic uncertainty and increased unemployment due to the pandemic, some retailers understandably are concerned that consumers will be hesitant to spend. Their worries might be valid, but companies can compensate for the current business climate and still surpass last year’s output with the proper promotional schedule and strategy. Even though shoppers may be less likely to spend frivolously, there is a higher appeal for them to get their holiday shopping done during a promotional period like Black Friday or Cyber Monday.
Many understand Cyber Monday to be the online version of Black Friday. While, traditionally, there is some soundness to that belief, this does not prevent businesses from offering promotions on their e-commerce sites for Black Friday and Cyber Monday. In fact, by utilizing both, especially in 2020’s climate, companies can increase the likelihood of connecting with consumers on at least one of these days. More promotions lead to increased website traffic and, thus, a higher hit rate for online sales.
While in-store sales may not return in full this November, Cyber Monday sales this year are poised to grow even higher than the 19 percent increase we saw in 2019. With this influx of orders and potentially high rates of new customers, companies need to be prepared.
For retailers, this means taking a minimum of 45 days in advance to plan. Now is the time to start taking stock, communicating with suppliers, and making plans. For businesses with a multichannel marketing plan, it is essential to have everything ready to deploy well ahead of the celebration date.
While getting promotions in place for significant sales days, like Black Friday and Cyber Monday, takes some time, other Q4 holidays require slightly less stress.
For example, two weeks should be enough time to prepare for holidays like Halloween and Veteran’s Day. Sure, Halloween may not bring in the type of revenue that Cyber Monday or Christmas might, but it does present the opportunity to introduce creative, holiday-specific marketing; and increase business.
Meanwhile, regional and local holidays can also boost sales. If there is a special day or event specific to your home market, show your customers that you are engaged in the community by having a sale or updating your homepage and social media with a fun marketing campaign.
Another way to boost “holiday” sales is to be hyperaware of days unique to Q4 2020. For example, November 3 is Election Day in the United States, which comes around only once every four years. While politics may be highly polarizing, sites can still be patriotic without alienating potential customers if that is a concern.
Christmas shopping can be a make-or-break event for Q4 sales. It is similar to Cyber Monday because it requires early planning. It is also crucial to remember that the Christmas shopping season doesn’t end on the 24th. Businesses should plan for potential after-Christmas sales or promotions to offset the inevitable returns from the folks who weren’t thrilled with their gifts. Christmas and other December holidays can be a lifeline to many businesses.
Although sales numbers and customer behavior are hard to predict for this year, Christmas provides certainty in an uncertain time. Despite many events being moved to different dates and foot traffic will likely be restricted, Christmas is not going anywhere. People have to do their shopping somehow, so this year is a massive opportunity for e-commerce sites.
With your promotions planned and holidays marked on your calendar, the final crucial step to tailor an optimal Q4 retail strategy is to provide your consumers with the correct discount. Too much of a deal and you hurt your business; too little and the customer may not see it as an incentive.
However, it doesn’t always come down to the discount percentage offered. CouponBirds found that customers are increasingly interested in site-wide incentives when it comes to discounts and promo codes, which means that in many cases, a 10-percent-off site-wide code will be used more often than a 15 percent discount on select items.
Increased web traffic means more competition — knowing a coupon is easy to use and applies to every purchase is essential. This allows consumers to shop for themselves and their loved ones the easiest way possible. Fewer clicks and less time searching can translate to better shopping results.
Setting the proper discount can also be utilized to capture repeat business or as a means to acquire customer emails. Pop-ups on e-commerce sites that incentivize shoppers to submit their email to receive a discount code on their first purchase provide value to the shopper and the seller. When a consumer follows the prompt, this type of discount virtually guarantees a sale, gives you information about your client base and provides a way to contact customers to keep them up to date on your business. Because of these benefits, providing a slightly higher discount amount is not detrimental and can result in higher ROI from that shopper as time goes by from future sales.
The unusual situation surrounding retailers in Q4 2020 can understandably cause some uncertainty. However, retailers need not fret. With the right discount strategy and promotional periods and holidays, e-commerce vendors can push last year’s sales records and set themselves up for long-term success in an online-first future.
Restaurants have been drastically and, in some cases, permanently changed in recent months. Many of the establishments that have survived the initial round of the pandemic have moved to take-out, delivery, or curbside-pickup models. Others have significantly altered their dining experience, ordering and payment processes.
While these changes in the restaurant industry have been in response to what is hoped to be a temporary crisis, it’s likely that dining establishments will never again operate exactly as they did before coronavirus. Those that survive and thrive will need to find ways to adapt to the new reality in which they find themselves.
“We are now seeing many parking lots being converted to outdoor dining with beautiful tents, heaters and fire pits to make the space look comfortable,” Dean Small, founder and managing partner of Synergy Restaurant Consultants, told the E-Commerce Times.
“With bars being closed in many states, operators had to readjust their thinking and how to maintain revenues by expanding their seating to more al fresco dining.”
Along with making changes in their physical designs to accommodate the demands of the pandemic, eateries of all sizes have also turned to new models for order taking, making deliveries, and payment processing.
“Smart operators are navigating these uncharted waters with more curbside pickup and delivery,” said Small. “In addition, many restaurants realized that their websites were not performing well to support the new surge of online ordering, so many had to make significant updates to enhance the ordering process.”
These shifts and upgrades are allowing restaurants to straddle the space between operating solely physical dining rooms and offering other forms of meal ordering, payment, and delivery.
“When shutdowns first went into effect across the country, we watched restaurants spring into action to find creative ways to drive orders when dining in was no longer an option, which meant spinning up solutions that enabled online ordering for curbside pickup or delivery,” Jennifer Sherman, senior vice president of product for NMI, explained to the E-Commerce Times.
NMI is a payments enablement technology provider, with headquarters in Schaumburg, Ill.
“Many smaller restaurants had never dealt with these applications prior to COVID-19. We’ve seen restaurants pivot their entire business model by shifting focus to online ordering and curbside pickup, or even get basic online and mobile ordering up and running for the first time,” added Sherman.
Another pandemic-related change in the restaurant world has been the move toward touchless payments. Ordering and paying in restaurants are increasingly done more seamlessly, and with less contact, than ever before. Allowing touchless payment options helps customers to feel safer in the process of dining out and can therefore making going out to eat more appealing.
“Implementing contactless payments into your existing digital strategy creates an effortless experience for your guests,” Sree Singaraju, senior vice president AI and cloud solutions for Mobiquity, told the E-Commerce Times.
“From ordering food online to payment and pick up or delivery, the whole process is touchless — a critical feature during COVID-19. Plus, customers can see exactly how much money they are spending before they complete their digital purchase; and before completing a transaction, you can show customers added costs, such as taxes, delivery fees, and service charges,” said Singaraju.
Ultimately, both restaurants and diners value the safety and ease inherent in touchless payment options.
“Now that we are starting to return to dining in, restaurants have figured out creative ways to process payments to reduce touchpoints that could spread disease and to make diners feel safe,” noted NMI’s Sherman.
“For customers that can now dine in, these new demands can be met through QR codes or contactless payments at the register or kiosk. We have seen increases in contactless card usage this season, but many of us, in the U.S. at least, still don’t have contactless-enabled cards in our wallets.
“In that case, scanning QR codes to direct consumers to pay on their phone can be used to reduce the number of physical touchpoints for customer payment and can create a modern and safe experience that diners will remember.”
Restaurants — and the way people order and pay in them — will likely continue to evolve.
“As anyone who has ever walked out of an Uber can tell you, the best payment experiences are the ones that don’t exist,” Sherman continued. “All of these technologies — QR codes, contactless payments, order online for delivery or pick up — are about reducing contact and increasing velocity. The most extreme example of that is one in which we can finish our meal and simply leave.”
How restaurants and the technologies that serve them evolve depends on an intricate back-and-forth between consumers, culture, and businesses.
“I think the questions we could be asking ourselves as a technology community is, ‘How close can we get to that end goal, what solutions will it take and how can that transform the experience of dining?’
“This will impact how we think about loyalty, ordering, and even how food is served. The solutions will be about more than just software, as we watch kiosks and vending machines move upmarket,” suggested Sherman.
“Most importantly, I think that we are going to see the restaurant industry lead the rest of retail into rethinking the way we handle payments, because when it comes to making customers feel safe, entertained, engaged and comfortable, who better than the hospitality industry?”
Though many of the changes in the restaurant industry are likely here to stay, it doesn’t mean that restaurants won’t continue to evolve, improve, and serve an important role in people’s lives. There just might be new expectations for what restaurants are and will be.
“In six months, it will be a great time to open a restaurant,” Bob Phibbs, CEO of The Retail Doctor, a New York-based retail consultancy, told the E-Commerce Times.
“People will want to get out, and 50 percent of the existing businesses that were around a year ago will be gone. It will be a perfect time to open a new concept built around more space, digitized menus, contactless payment, and the like. If restaurants can just hold on until then, they’ll be seen as heroes and rewarded for making it through this dark time.”
Google on Tuesday took a step toward controlling spam voice calls on Android devices with a new addition to its phone app.
The “Verified Calls” feature will display a caller’s name, logo, reason for calling and a verification symbol indicating a business has been verified by Google.
“This is done in a secure way — Google doesn’t collect or store any personally identifiable information after verification,” Google Product Manager Gal Vered explained in a company blog.
Google Phone, which will feature Verified Calls, comes preloaded on many Android phones. For those that don’t have the app out of the box, the company announced the software will be available later this week as a download from the Google Play store.
The service will initially roll out in the United States, Mexico, Brazil, Spain and India, with more countries to follow.
“Google is following a path that all carriers have to follow,” said Liz Miller, vice president and a principal analyst Constellation Research.
“These robocalls, these scam calls have become a significant problem, not only because they’re an invasion of privacy, but because they’re working,” she told TechNewsWorld.
According to an FCC report, the median loss in 2019 for a consumer who fell for a phone scam was US$1,000.
“At the carrier level, at the app level and at the device level, everyone is trying to figure out a way to combat this,” Miller continued. “I think Google’s answer through this app fits into the mold of being part of the solution to this problem.”
Bob O’Donnell, founder and chief analyst with Technalysis Research, noted that Google’s offering could be very useful. “We all get spam calls from all kinds of places so more and more companies are trying to figure out ways to block them,” he told TechNewsWorld.
“The one challenge is that the carriers are also trying to provide some of these services so there’s a potential of overlap, but I think it makes more sense to provide it from the OS perspective,” he continued.
“The carriers don’t have nearly as much information as Google,” he added.
“There’s been a renewed interest in preventing scams and robocalls, which have exploded in the past few years,” said Ross Rubin, the principal analyst with Reticle Research.
In March, for example, the FCC launched its STIR/SHAKEN initiative, which is supposed to be fully implemented in 2021. STIR/SHAKEN — Secure Telephone Identity Revisited (STIR) and Signature-based Handling of Asserted Information Using toKENs (SHAKEN) — takes aim at caller ID spoofing. Spoofing occurs when the caller ID number displayed on a phone isn’t the one belonging to the caller.
With STIR/SHAKEN, calls traveling through phone networks will have their caller ID “signed” as legitimate by originating carriers and validated by other carriers before reaching consumers.
“Google goes a step further than that by identifying the rationale for a call,” Rubin told TechNewsWorld.
On the carrier side, T-Mobile has launched ScamShield, which gives its users control over a suite of protections against unwanted calls.
“The T-Mobile approach is a classic filtering play, trying to block as many robocalls as possible,” Rubin explained. “Google is not only trying to validate the caller but the value of the call itself.”
Apple, too, has joined the anti-scam party with its “Silence Unkown Callers” feature in iOS 13. When the option is enabled, all calls from unknown numbers are sent to voice mail automatically.
Although Google isn’t storing any personally identifiable information with Verified Calls, that doesn’t mean Google isn’t collecting data from the process.
“What Google is telling businesses is if you register with us and tell us who you’re calling and what the call is about, we’ll forward that to the caller,” explained Jack E. Gold, founder and principal analyst with J.Gold Associates.
“The problem is calls have to be registered with Google to make that happen,” he told TechNewsWorld. “Do we trust Google to have that additional data about us?”
“The data isn’t personal, but they still have your phone number,” he continued. “It’s the same thing with web browsing. They don’t retain any personal data with web browsing either, but they know what ads to serve you, don’t they?”
“Google is saying it’s trying to help users of Android systems, which is probably true,” he added. “On the other hand, do I want Google to know that I have bank accounts with the Bank of America?”
“This is a double-edged sword, and raises all kinds of privacy concerns,” he said.
Google doesn’t do anything that doesn’t benefit Google, Constellation Research’s Miller added.
“There’s certainly data that’s being collected and stored, it’s just falling outside the realm of personal identifying information,” she said.
Information gathered by Google during the verification process could also be used to gain a competitive advantage over rivals.
“If Google can gain insights into the needs of the businesses doing these verifications, that’s an opportunity to better tailor online advertising to those businesses,” Rubin suggested.
“Facebook is a very important marketing channel for a lot of small businesses,” he continued. “Google wants to be able to compete there. If it has a better sense of the products and services of a business, it can better tailor its online advertising offerings to that business.”
Although Verified Calls is being launched as a free service, some experts believe it could be converted into a cash channel in the future.
A year from now, Google could go to companies and say, “We increased your call pickups by X percent. It’s time to start paying for this service,” Gold speculated.
“This is a great money-making opportunity for Google,” Miller added. “It’s part of Google being part of the solution but also finding a nice revenue stream to help businesses get people to pick up the phone.”
Technalysis Research’s O’Donnell, though, maintained that getting businesses and consumers to use Verified Calls will produce revenue for Google without charging for the service.
“Google wants to get people to use their services,” he said. “Using their services produces more data and information for them. More data and information can be turned into advertising revenue for them.”
Ask anyone in the e-commerce space, and they’ll tell you that it’s a numbers game. The numbers we rely on every day offer insights into every aspect of our competitive industry, from the click-through success of advertising campaigns to the conversion rates of specifically placed “Buy Now” buttons.
Yet, in this world of quantitative analytics, we’re losing something: the human element. The reliance on quantitative insights offers a universe of instructive and actionable data, but it reduces customers and potential customers to numbers. In short, it can tell us the what of people’s actions, but it neglects the why.
Answering the why is a much trickier proposition because it relies on conversations with customers. Through conversations, e-commerce leaders are able to glean qualitative insights that can inform everything from more successful site structures and pathways to purchase to understand the motivations behind customer actions.
When taken as a whole, the blend of qualitative and quantitative insights allows e-commerce professionals to offer a personalized experience for their customers powered by people. By understanding and addressing customer wants and needs by leveraging direct interactions, e-commerce companies can gain an immense competitive advantage over those who solely take a numbers-based approach to their insights.
When we talk about “personalization” in e-commerce today, what does that actually mean? In many cases, it means that e-commerce provides ways of tailoring a shopping experience to a specific customer. This personalization can take many forms: advanced recommended product dialogues, targeted advertising that follows customers around the websites they visit, emails with a customer’s name in them, and specialized offers based on a customer’s shopping history.
The issue with this personalized approach, however, is that it’s algorithmically generated. It is, by definition, impersonal.
In some instances, it can be downright off-putting. We’ve all been there: we view a product once, and for the next week, every other website we visit has a targeted ad featuring that product. The word Orwellian gets tossed around a lot these days, but this form of targeting can feel unnerving and downright frustrating, especially if it’s a product you’ve already purchased.
Company interactions in e-commerce can also give the illusion of personalization without actually offering a personalized experience. Many companies rely on bots or auto-generated chats that give the impression of a real interaction while sapping out the humanity of it.
These uncanny experiences are the reality of many e-commerce customers, and while it’s certainly better than providing no unique experience at all, it can be a deterrent to creating return customers or earning that conversion. In worst cases, more privacy-minded customers can bristle at the uncanny aspect of algorithmically generated personalization, feeling that their data is being harvested (which it very well might be).
While there’s an entire industry structured around gathering quantitative data on customers, it’s important to recognize that data only tells one side of the customer’s story. It reveals what a customer did — whether they clicked or didn’t click, bought or didn’t buy — but it fails to address the motivations behind their actions.
E-commerce companies have leveraged polls to try and answer for the motivations, but again, polls function rigidly based on predetermined sets of responses. They get closer to answering the why but don’t allow for follow-ups or any deeper understanding. The reality is, in many cases, polls offer yet another quantitative data set that can be used to influence the on-site experience.
To truly understand customer wants and motivations, e-commerce professionals need to talk to their customers. There are a number of tools available to gain these insights, but the safest and most effective in this socially distanced era is smart video platforms.
Smart video platforms differ from the traditional video conferencing systems we’ve all become accustomed to over these past few months in that they offer a number of structured tools presenters can use to guide conversations with customers. These smart platforms also include tools that can be used to elicit real-time reactions to generate and gain valuable insights from customers.
Through smart video platforms, hosts are able to screen share and observe customers as they go through the buyer’s journey on a website. But unlike traditional quantitative analysis that only shows where a customer clicks, in a structured conversation, the host can ask why a customer did or didn’t click in a particular place. Hosts can determine what barriers exist that prevent customers from completing tasks.
Most importantly, from these behavioral studies, e-commerce professionals can speak to customers about their experiences and learn first-hand what improvements can be made to make the shopping experience more intuitive. It’s these qualitative insights that can uncover what customers truly want from a buying experience while providing room for follow-up questions to further understand what executable actions can be taken to make these changes a reality.
Oftentimes, e-commerce professionals can get a sort of tunnel vision — a “developer mindset” — that detaches them from the real-world customer experience of a website. Over time, what becomes intuitive and logical to those building a website becomes untethered from the reality of shopping online. These conversations and real-time site use monitoring studies allow e-commerce specialists the ability to see their site through objective, fresh eyes and adapt accordingly.
The way personalization exists on e-commerce sites today may be data-driven or impersonal in many ways, but that doesn’t mean it isn’t valuable or effective. Having intelligently recommended products or customized email campaigns serves customers with products and offers that can generate sales.
The personalization gleaned from qualitative analysis, however, is more structural. The real-world insights gleaned from structured conversations with customers allow e-commerce professionals to tailor the shopping experience to meet the needs of how customers actually shop. By empathetically listening to customer feedback, website personalization can be adapted to a nuanced understanding of needs, wants, and motivations.
For example, an e-commerce company can remedy points of friction within the buying process by observing roadblocks to checkout and altering button placement or changing language for clarity. They can also find areas on their website that might confuse customers and discover places where they can offer additional explanatory text or contact dialogues to help customers feel acknowledged and aided.
Video platforms provide a new frontier for e-commerce. Not only can smart video be used to communicate with customers in a focus group-style setting, but as customers become more comfortable with video conversations as a part of their everyday routine, it can be leveraged as a way to provide high-level sales and customer support, allowing valuable customers to get a face-to-face, personalized experience with a member of the team.
But more than anything, smart video platforms provide e-commerce professionals with a way to answer the why through conversation, to turn customers from numbers on a page to human beings with personalities and preferences that can be translated into real-world changes that create a more personalized e-commerce experience.
It can’t be understated how important the value of quantitative analytics is, but it doesn’t tell the whole story of a customer’s motivations. Qualitative analysis through conversations with customers helps answer the why.
The way personalization works in e-commerce now is largely impersonal, meaning it gives the illusion of personalization through algorithmically generated content.
By leveraging conversations with customers through smart video platforms, e-commerce professionals can create a real, personalized experience based on qualitative customer insights.
Fueled by the ongoing pandemic, consumers are now more rapidly embracing the use of digital wallets and are buying digital gift cards for personal use.
Branded payments provider Blackhawk Network released its 2020 Multinational Branded Pay report in July. The findings reveal a large upswing in digital wallet adoption among surveyed shoppers in eight markets using various digital wallets.
The research also found that more than half of consumers surveyed have now purchased or received a digital gift card, which, unlike physical gift cards, are as likely to be purchased for self-use as they are to be gifted to someone else.
The data examines attitudes and behaviors around shopping, payments, and gifts, including research conducted both before the peak impact of the global pandemic and supplemental data gathered as many countries began phased reopenings.
Over the last few months, the company has seen a rapid shift to digital for both consumer demand and the need for retailers to adapt to meet customers where and how they are shopping, according to Theresa McEndree, vice president of marketing at Blackhawk Network.
“Our research found a surge in digital wallet adoption, with 88 percent of surveyed shoppers across eight countries reporting that they use a digital wallet of some kind,” she told the E-Commerce Times.
Many of these changes will likely be permanent as a result of the pandemic. The brands that survive and ultimately thrive will be those that adapt quickly and actively look for ways to seamlessly engage people across the channels they find most valuable, she added.
The report is based on responses from more than 12,000 consumers from the U.S., Canada, Mexico, Brazil, the U.K., Germany, the Netherlands, and Australia.
The rise in digital wallet adoption shows a marked contrast with the slow growth in digital wallet use in the U.S. before the pandemic hit. Less than 38 percent of Americans surveyed said they were using digital wallets to make purchases more than, or as often as, the year before.
As the economy began to reopen, that number has jumped to 55 percent. Those not currently using a digital wallet are not likely to start.
Only 29 percent surveyed show any interest. A scant 6 percent said they are very interested.
Barriers to adoption focused on consumers’ reservations about using digital wallets. Consumers said they had a lack of knowledge about how digital wallets work, how secure they are, what the benefits are, and which one would best suit their needs.
Payment priorities also influenced decisions about using digital wallets instead of more traditional payment methods. Some 94 percent of those responding said their in-person or online payments are guided by concerns about security, safety, reliability, ease of use, and no fees as the most important criteria.
Slightly more than half (52 percent) said they purchased for their own use or received digital gift cards. However, unlike physical gift cards, digital gift cards are just as likely to be purchased for self-use as they are to be gifted to someone else.
Those who purchased digital gift cards for self-use do so to treat themselves, make an online purchase or take advantage of a discount or promotion. Those who purchased digital gift cards for others do so because:
– The gift can be emailed immediately.
– The recipient can make online purchases.
– It’s a faster and easier purchase to make compared to an in-store purchase.
The transformation and move toward digital has been inevitable. But the COVID-19 crisis and resultant changes in consumer shopping was a wake-up call to retailers, noted McEndree.
“It helped accelerate the realization for retailers that they need to make sure they are equipped to meet consumer demands in order to survive and thrive in this new environment,” she said.
When the pandemic hit, many people who had not used a digital wallet previously began testing the waters. They became more familiar with how user-friendly and convenient digital can be.
“As more consumers become comfortable using digital wallets — and come to prefer them — it’s not a stretch to assume that many will adopt these shopping habits permanently, causing adoption rates to continue to grow,” said McEndree.
The rapid, continuing shift to online commerce has opened opportunities to promote other payment methodologies, including digital wallets, according to Charles King, principal analyst at Pund-IT.
“Winning solutions are those that reduce or eliminate friction for consumers. At one level, digital wallets are all about enhancing convenience for consumers who are tech literate and have access to dependable online and wireless services,” he told the E-Commerce Times.
Health fears pushed consumers to prefer digital wallets over credit and debit card payment methods, King noted. The initial push arose from consumers’ concerns about whether COVID-19 could be transmitted via contact with physical objects.
“That offered a sterling opportunity for promoters of contactless payment options, like digital wallets, over traditional credit and debit cards. For many consumers, habits are like doors that only open one way. Once they enter, they seldom return to prior behaviors,” he said.
The digital transformation that happened in retail in recent months accelerated to levels not expected until 2022 to 2023, added Blackhawks’s McEndree. It further exposed the disconnect between digital payments and in-store point of sale.
McEndree sees the transition to digital as elevating mobile payments and the customer experience to new levels. The payment journey will now become a key component of the customer journey.
It will unify the mobile payments experience to yield more complex interactions between traditional players and third-party payment providers, she explained. The delivery of more valuable, consumer-focused payment experiences will increase the opportunity for immediate rewards and proactive engagement, offering more value than just the transaction itself.
“Digital ecosystems and networks will broaden both the relevance and reach of rewards, blending in more and more with daily consumer activities,” she said.
The survey makes clear the role the pandemic is playing as a catalyst that pulled digital payments, gifting, and shopping to the forefront. There is no longer any doubt that digital adoption is gaining momentum at lightning speed, McEndree observed.
“We’re only beginning to realize what shifts in shopping, gifting, and payment behaviors and preferences will be permanent as a result, she said.
As a result, businesses will need to keep a pulse on trends like those highlighted in the Blackhawk report to avoid lagging behind and missing valuable opportunities to engage new audiences, satisfy customers, and boost the bottom line through new sales opportunities, McEndree suggested.
The survey found that 44 percent of respondents reported being unlikely to return to their normal shopping behaviors as stores start to reopen. In the U.S., 78 percent of surveyed consumers expect permanent changes to shopping experiences as a result of COVID-19.
In the last quarter of 2019, Amazon generated a revenue of US$87.4 billion, showing a 21 percent increase from the same quarter last year. With the pandemic giving online shopping a further boost, there are now reasons to believe that the e-commerce giant will see a record holiday season this year.
However, the way this surge will be handled is a concern for many. Amazon itself recently confirmed that it is facing fulfillment center capacity limitations, mostly due to four events: COVID-related staffing issues, the persistent demand for essential products, prioritization of items slotted for Prime Day, and regulator Q4 demands. Navigating these realities will certainly be a challenge — but what exactly does this mean for vendors?
One thing is for sure: Direct Fulfillment (DF), Amazon’s drop ship program that allows vendors to ship directly from their warehouses to their customers, is going to become increasingly prevalent — especially considering that Amazon may actually begin forcing vendors to participate to alleviate its own pressure. Adopting the scheme now brings a great opportunity for vendors to secure and support their business during the peak season.
Amazon vendors should prepare to adopt Direct Fulfillment immediately. But why is this the perfect moment, and how can its benefits be maximized during the remainder of 2020?
The lead-time challenges, so emblematic of March and April, are still vivid in everyone’s mind. The number one e-commerce platform in the U.S. struggled to keep its delivery promises, and many items had anywhere from 7 to 15 days lead time, even on Prime-eligible products. Considering how Amazon takes pride in A to Z order fulfillment, and puts an emphasis on customer experience, this was truly unprecedented.
With the end of the pandemic nowhere in sight, not much is likely to change. Amazon’s operations will continue to be under strain throughout the peak season, as stores attempt to balance their volume and social distancing policies in an attempt to drive sales.
Walmart has already made the decision to close its stores for Thanksgiving to “rethink Black Friday,” and Target has also joined this policy. Steps like these clearly show that e-commerce is only going to grow further.
Even now, several of Amazon’s fulfillment centers are operating at capacity. This is also the first time that Prime Day will be pushed to Q4, as normally it runs in July. It’s beyond obvious that there’s no point in waiting to see how the situation plays out. Instead of a passive, reactionary approach, it’s key to adopt a sense of preparedness. Whether it’s established vendors, partners, or newcomers, having a path or ability to support the business regardless of Amazon’s capacity should be a priority.
That’s why Direct Fulfillment can now create an invaluable safety net. Without it, vendors risk experiencing disruptions and losing out on sales during the lead time it takes to get inventory back to Amazon. In fact, Amazon has already begun duplicating vendor catalogs with a DF vendor code without any notification or announcement, representing another clear push. Understanding and driving the full potential of DF will be a major success determinant in Q4.
One of the main benefits of DF is that it doesn’t require any interaction with Amazon fulfillment centers. Vendors can easily provide real-time inventory via an electronic data interchange (EDI) feed for an entire catalog. But at the same time, DF doesn’t have to be exclusive. Vendors can continue to receive purchase orders for in-network shipments while participating in DF — a process referred to as “dual listing.”
DF also allows vendors to showcase their ability to provide service. Products enrolled in DF are considered Prime products, and — unlike the regular in-network scenario — Amazon pays all the shipping costs. DF-listed products obtain a free shipping badge for Prime members and their delivery promise is solely based on a vendor’s shipping capabilities: the team, the warehouse, and the resources.
Vendors participating in DF aren’t required to ship with the same service level agreement as an Amazon fulfillment center, meaning that the three-day rule doesn’t apply. However, the lead time will be reflected on vendors’ product detail pages, based on their true order speed. The faster the process, the more likely a sales conversion becomes. The longer the lead time, the less likely the customers will be to make a purchase.
So, while DF allows vendors to be in greater control over the availability of their inventory and their schedule, it also demands focus on streamlining one’s operations to keep processes running smoothly and best prepare for the peak.
When it comes to DF, the golden rule is to keep a close eye on inventory. Inaccurate inventory feeds could lead to canceled orders, chargebacks (of $10 per instance), and ultimately warehouse suspensions. During the peak, vendors should look to update their inventory at least three times a day; and if the warehouse is getting behind, or if there are any issues with a particular ASIN, vendors can zero out the inventory immediately.
Moreover, vendors should aim to clear out any backlog and keep up with orders as quickly as possible. Any order sticking around for longer than it should will inherently impact the metrics. By reviewing historical data and creating projections, vendors can also align resources to specific times to better facilitate orders and pick-up. Obviously, this might require extra resources, so vendors looking to best navigate the peak might need to consider staffing up, especially during events like Prime Day, Black Friday, or Cyber Monday.
Ideally, vendors should ship orders on or before the required shipping day. There’s no penalty for shipping earlier — in fact, it can greatly benefit the lead time and give vendors a big lever to pull when it comes to the overall conversion rate. However, vendors should always remember to ship through the method Amazon provides because mismatches are also charged at $10 per instance.
At the end of the day, understanding DF means understanding how Amazon defines success. The metrics that the platform deploys are specifically designed to better communicate lead times and delivery expectations to its customers. To keep the numbers up, vendors should always look to maintain an accurate inventory, ship on time, ensure they register the advanced shipment notifications (ASN) or order confirmation, and strive to get the same day carrier stamp.
Direct Fulfillment pushes vendors into the driver’s seat — bringing both new benefits and responsibilities. When adopting the program, it’s key to have all the right processes in place and constantly work to optimize operations further. This should be done sooner rather than later. If Amazon imposes DF, vendors that already know how to make the best of it will be better equipped for all the things this year’s shopping season might bring.
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