The New Normal – COVID-19 Data Trends in eCommerce and Fraud

April 2, 2020

Consumers are adjusting to changes in their lifestyles as a result of the coronavirus pandemic. The need to social distance and stay safe at home means that consumers are altering their buying habits and increasingly making online purchases that might have previously been in-person transactions. They are ordering ahead at restaurants and shipping groceries directly to their homes. Businesses are subsequently adjusting to the way they meet new demands.

Kount is able to identify trends in eCommerce with data from its Identity Trust Global Network, made up of thousands of businesses worldwide across more than 75 industries. The data shows an interesting shift in the way consumers are engaging with eCommerce. It also reveals enhanced fraud activity and new patterns.

The following overview gives transaction trends across retail, gaming and wireless, and restaurant sectors, as well as the fraud trends that parallel the increased focus on digital purchases.

For detailed charts that illuminate the data discussed in this article, view our site dedicated to tracking COVID-19-related eCommerce trends

Retail

It’s no surprise that consumers are focusing on health and disease prevention measures during the Coronavirus outbreak across the world. One of the first areas that Kount has tracked over the month of March, when many “stay safe at home” measures were announced, covers wellness and vitamin purchases. These sales are increasing, but with a slight caveat – sales of wine have increased as well. Families want to stay healthy and remain self-contained. Rather than going out to restaurants and bars, they are spending more time creating experiences at home.

Since families are sheltering in place together, they are looking for activities that are both educational and entertaining. Arts and craft sales are seeing positive growth. Since many employers have adopted work from home options, there was a surge in purchases for electronics and home office goods.

  • 43% increase in wellness and vitamins
  • 113% increase in crafts and wine
  • 54% increase in home office/electronics

As purchasing momentum around the pandemic exploded early to mid-March, same day or next day shipping requests rose as consumers were concerned about available quantities of goods.

Check out our blog on trends in the Buy Online Pick Up in Store (BOPIS) Channel.

Here are 4 fraud trends identified by Kount that mirror the shift in retail digital purchases:

  • Resellers – Fraudsters buy low and sell high using an eCommerce retailer’s supply chain to fulfill orders.
  • Retail Arbitrage – Similar to reselling, but more dangerous because bad actors use sophisticated technology to automate the entire process providing scale and speed.
  • Cashing Out – Bad actors buy goods or obtain cash using stolen credit cards or other user account data.
  • Friendly Fraud – customers request refunds from their issuing banks, claiming that transactions on credit card statements are fraudulent when they are in fact authentic.

Gaming and Wireless Transaction Volume Increasing

An area that is seeing a spike in popularity is the gaming and wireless industry. This is not surprising to note since more people seek entertainment while at home. The week of March 16-22 resulted in a 48% increase in transaction volume in this space.

However, fraud trends are not far behind and within gaming and wireless, vendors should monitor instances of the following risky fraud tactics:

  • Credential Stuffing: Mass login attempts used to verify the validity of stolen username/password pairs. This information is used to take over accounts.
  • Account Takeover: Illegal access to genuine customer accounts.
  • Streaming Potluck: Each member of a group brings their account for a streaming service and shares the access information so that all have access to the services.

Quick Service Restaurants (QSRs) that Offer Mobile-Ahead Ordering

Food service businesses are showing significant growth year-over-year in digital channels. Yet, government mandates on rules related to the pandemic are influencing transaction volumes at some restaurants. After widespread orders to shelter in place the week of March 16, restaurant transactions have declined. Many have implemented mobile order-ahead and curbside pickup practices. Overall, however, restaurants face an inevitable drop in sales.

Fraud trends in the restaurant and food service industries include:

  • Pizza Plug – Fraudsters use stolen accounts to provide heavily discounted food delivery
  • Compromised Accounts – Fraudsters use online marketplaces to sell access for compromised accounts for streaming and food delivery. Marketplace accounts can have stolen accounts from hundreds of brands.

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