Half of UK retailers anticipate a spike in fraud attacks on their businesses in the Q4 shopping period, new research commissioned by payments platform Adyen.
The news comes at a time when many retailers are already feeling the effects of fraud. More than a third (37 per cent) report an increase in fraud attempts on their business during the pandemic, while a quarter (26 per cent) admit that they fell victims to fraud or a data leak over this period.
With retailers depending on the peak period (Black Friday, Christmas, and the January sales) to boost annual retail revenues, fraud attacks at this time can be even more catastrophic. This year, when retailers have been tackling supply chain disruption, staff shortages, and the lingering effects of the pandemic, 53 per cent describe peak as ‘make or break’ for their businesses.
Despite challenges, retailers are optimistic about the peak season and the possibility of shoppers returning to stores. The majority (56 per cent) say that physical stores will play a more important role in this peak period. Customers appear to agree; less than a third (32 per cent) say they will avoid shopping in stores following the pandemic.
However, retailers must focus on delivering stand-out experiences while protecting against fraud, or customers will vote with their feet. Almost two thirds (65 per cent) said they will not shop with a retailer again if they have a bad experience, either in-store or online.
Consumers also have high expectations for the hospitality sector when it comes to fraud protection, with 57 per cent believing that restaurants, bars, and cafes need to do more to protect them from fraud.
“The peak shopping period is so important to retailers every year, but it has taken on even more significance in the context of the pandemic,” said Colin Neil, UK Managing Director of Adyen. “After the disruptions of last year’s regionalised lockdowns running into Christmas, retailers can take heart that consumers are looking forward to returning to stores again.”
Neil continued, “but whether in-store or online, a laser-focus on fraud defence will be critical, especially since fraudsters are most active during these busy periods. Luckily, today, the same technology that ensures customers enjoy the smoothest possible payment experience, also acts to protect them. AI and machine learning helps customers authenticate themselves quickly and easily, keeping payments frictionless while safeguarding their data and your business.”
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