Hundreds of millions of shoppers around the globe have been quarantined at home, shopping online as they shelter in place. In fact, on average there has been double the number of new shoppers online during the pandemic than there was before. Current conditions have provided merchants a growth engine to drive new revenue and encourage customer lifetime value but at the same time the new user missed opportunity is also on the rise.
The statistic that should terrify online retailers of all sizes is that new shoppers are 5-7x more likely to be declined by current fraud tools than returning customers… and that’s if they aren’t already put off because you hijacked the cart with unexpected shipping charges or didn’t offer their favourite payment method.
Not only are merchants turning away a new potential revenue stream, they are also missing out on the valuable lifetime value of each of each of these customers. Using data from existing Forter network customers, it’s possible to estimate the real missed opportunity cost:- £684 in the apparel and accessories category, £589 in home and garden and as much as £781 in food and beverage.
Worryingly, merchants can lose up to 75x more revenue to false declines than they do to fraud so the new user missed opportunity is a serious impact to the bottom line. No one is suggesting turning a blind eye to fraud in order to accept more orders, so how do you solve the problem of differentiating a flood of new users during lockdown from the few fraudsters taking advantage of the global pandemic?
The Forter network offers access to knowledge and insights gained from a wider set of data across enterprises, banks, payment providers, geographies, and industries offers retailers a more accurate view of legitimate consumer behaviours and interactions, resulting in higher approvals. Instead of requiring shoppers to provide more information, adding friction to the buying journey, a robust network of data powers the ability to make instant and accurate decisions — no added friction.
If you would like to learn more about the new user missed opportunity and how to solve it, download Forter’s ‘Are new shoppers falling out of your funnel forever?’ report here.