How The Pandemic Accelerated The Shift To Digital Commerce

“Digital transformation is inevitable, and the companies that can protect the entire customer journey while delivering exceptional experiences will have the advantage.”

As transaction volumes soared and millions were onboarded remotely during the lockdowns, cybercriminals had a field day. And they still are having one. Financial institutions and merchants that are hypervigilant with security will be rewarded with loyalty. “The ‘shove’ toward eCommerce means more businesses are offering new digital experiences,” said Brad Wiskirchen, CEO at Kount. “That includes memberships, accounts, loyalty points and more … each representing a unique area of the customer experience that should be protected.”

The following is an excerpt from How 35 Execs Are Powering The Great Digital Shift Of 2020 (And Beyond), contributed by Brad Wiskirchen, CEO at Kount.

In a 2019 PYMNTS eBook much like this, we made predictions for eCommerce in 2020 and the next decade. I recall writing about the role that artificial intelligence (AI) would play in protecting the complete customer journey.

Just six months into the new decade, we’ve seen that play out in ways we couldn’t have predicted in 2019. With the pandemic spurring overnight digital transformation and innovation, the roles that fraud prevention, customer experience and AI play in commerce have grown faster than ever. This introduces new opportunities, as well as reasons to reject the status quo and lasting lessons.

Opportunities: New Channels of eCommerce

With an unprecedented number of physical locations closed, brick-and-mortar retail and restaurants needed to adapt quickly in order to stay open. For many, this meant expanding new channels of eCommerce, such as buy online, pick up in-store (BOPIS), delivery offerings, mobile order-ahead and more.

Some of these companies experienced a steep learning curve — not only did they need to find a way for customers to shop and pay, but they also needed to create a method for pickup, delivery and authentication. During this shift in behavior, a negative experience could cause a loyal customer to abandon a brand or switch to a more convenient option.

Rejecting the Status Quo: Cumbersome Manual Reviews and Customer Insults

In uncertain times, customers want their necessities to arrive quickly. For example, expedited shipping increased 305 percent year over year in mid-March as people began to stock up. That urgency doesn’t allow for cumbersome approval processes. Fast, accurate approvals are also essential for mobile order-ahead at restaurants, as consumers often expect meals within minutes of placing their orders.

Worse than a long manual review is the risk of insulting a good customer by turning them away because of a false positive. Unsophisticated fraud prevention strategies couldn’t adapt as the pandemic changed both how people shopped and what they bought. Suddenly, ordering 10 bottles of hand sanitizers at 3 a.m. might not be as unusual as it once seemed. Supervised machine learning or rules engines alone can’t catch these nuances in real time. Next-generation AI that combines both supervised and unsupervised machine learning with a robust data network of trust and risk signals can better identify what good or risky orders look like today.

This means eCommerce businesses, whether well-established or just entering the digital learning curve, must take an approach that suits their needs. An AI-driven platform coupled with flexible policies can be customized while also reducing manual reviews, false positives and chargebacks.

Lasting Lessons: AI-Driven Fraud Protection Across the Customer Journey

As the pandemic accelerated in March and April, we saw digital transaction volumes skyrocket for many industries, like vitamins, wellness, electronics, pet supplies and others. In April, purchase volumes for crafts and online wine were up more than 600 percent from the average February week. Handling that volume while maintaining exceptional customer experiences and preventing fraud requires an adaptable solution that can make accurate decisions in real time.

And the “shove” toward eCommerce means more businesses are offering new digital experiences, including memberships, accounts, loyalty points and more — each representing a unique area of the customer experience that should be protected.

A lasting lesson in 2020: Digital transformation is inevitable, and the companies that can protect the entire customer journey while delivering exceptional experiences will have the advantage.

Read more executives’ insights in How 35 Execs Are Powering The Great Digital Shift Of 2020 (And Beyond).