The holidays are in the air already, meaning retailers need to get their approach to shipping into shipshape order. It’s a great opportunity to win customer loyalty – as long as you don’t blow it by turning them away.
Customers Care About Shipping
The 2024 Trust Premium Report found that 95% of consumers said shipping policies are essential in deciding where to shop. 95%! Just as striking, 53% said they had abandoned a cart in the last three months due to restrictive shipping policies.
Customers care about shipping. They may be willing to invest time and thought into choosing the correct items and finding the best prices, but once they’re ready to purchase, they expect shipping to be the easy part. Ideally, their goods should arrive quickly, with no hassle and minimal cost.
This can present a challenge for retailers, who sometimes allow loss prevention considerations to negatively impact customers’ experience of shipping processes and policies. Fulfillment might be delayed by time-consuming manual review processes; for example, customers might be required to set up an account on the site to receive physical goods or jump through identification hoops when they send them to a new address.
Friction Can Be Fatal
While friction can help retailers gain confidence in shoppers’ good intentions, relying on it too heavily can be disastrous for business. In fact, the Trust Premium Report found that 78% of US and UK consumers will likely abandon their online shopping carts if the process is too difficult or time-consuming.
That means merchants are responsible for ensuring a smooth, streamlined checkout process and avoiding the temptation to allow verification processes to negatively impact shipping.
Retailers who fail to successfully navigate this delicate balance will suffer; in the last three months, the report found that 31% of consumers have abandoned their shopping carts because of a complicated checkout. The message is clear: don’t overcomplicate.
Merchants who do manage to find the right balance stand to benefit. The “Trust Premium,” or the additional amount consumers are willing to spend with brands they trust, was found to be 51% in 2024. That’s worth investing effort into achieving.
The Challenge: Shipping Address Expansion in the Holidays
In 2023, Forter’s research found that consumers shopping during the peak holiday season were more than six times more likely to ship an order to an address different from their standard one.
Customers send gifts directly to the recipients, sometimes using addresses they only send to during this one time of the year. They sometimes also send gifts for family members to offices so that they can keep them secret until the day. One way and another, there are many more address options in play than usual.
Merchants who rely heavily on restricted options, such as a match between shipping and billing addresses or the demand to see an address in use multiple times before it can be approved without extra friction, will struggle to accommodate this flexible reality. As we said, that can cost good customers.
Fraudsters Sense Opportunity
Fraudsters know that the shipping picture is more complex during the holiday period and take advantage of it. In fact, across industries, about 10%-15% of fraud attempts in last year’s holiday season involved some form of address manipulation. They know they can get away with more.
One additional trick that came up last year was an innovation in which fraudsters broke into existing customer accounts and did nothing other than change the primary shipping address. The idea was that some customers wouldn’t notice that their default address had changed, and the fraudsters would receive free goods for virtually no effort on their part.
So, on the one hand, customers expect to receive a smooth shipping experience and may go elsewhere if you can’t provide it. On the other hand, fraudsters are waiting to leverage any loophole.
Focus on Identity
Customers should be allowed to ship to a range of addresses without paying a penalty in extra fees or burdensome verification. That’s best for them and also best for businesses.
Merchants who expand their vision and focus not on the individual addresses but on the shopper’s identity as a whole will be able to find the best experience for everyone. That’s possible because customers have a much richer online presence and history than any single transaction or address.
Here are some helpful things to consider:
- Have you seen this customer before? If so, what do you know about them? Have they used this address before? Or one in close physical proximity to it? What about IP addresses? Have they connected from somewhere close to them?
- Is their device, browser, and operating system one you’ve seen before?
- Does their behavior match past patterns?
- Does this purchase resemble past purchases at holiday times, even if it differs from those they make during the rest of the year?
- Are you using a fraud prevention provider that can tell you about these factors connected to the customer on other sites, not just yours?
A customer is not an address. Once you start looking at who they are online, you can give them a great shopping experience every time—no matter which address they want to ship to.
Doriel Abrahams is the Principal Technologist at Forter, where he monitors emerging trends in the fight against fraudsters, including new fraud rings, attacker MOs, rising technologies, etc. His mission is to provide digital commerce leaders with the latest risk intel so they can adapt and get ahead of what’s to come.
