The e-commerce market in the world is growing at a rate faster than we can comprehend and with unforeseen growth, comes unforeseen responsibilities. Studies show that e-commerce sales worldwide are predicted to reach $632 billion by 2020!
But, do you know what’s bigger than the market itself? It’s the implications of fraud that come with it. As the trade grows, it’s only fair to assume that the online market has become a breeding ground for online fraudsters to innovate their tactics.
E-commerce fraud is one of the least talked about things for an industry so big. Most merchants assume the losses or fraud instances experienced during their stint is just “cost of doing business”.
Related read: Is 30% RTO the Cost of Running an E-commerce Business?
A closer look at e-commerce frauds
Before we understand the impact of buyer action on an e-commerce business, it’s essential to evaluate the problem statement. So, let’s dive right in!
Here’s the thing– e-commerce businesses don’t have it easy, especially the small ones. In a hypercompetitive e-commerce environment, the only way to stand out is to offer exceptional customer satisfaction.
To meet with the mounting expectations of customers, merchants often don’t have a choice but to ship risky orders, in the fear of losing out on a genuine customer. This can often put a toll on the merchant’s budget, as Return-To-Orders take up the cost of logistics back and forth, often leading to losses.
Here’s how e-commerce companies lose money in processing these orders:
- Forward & reverse logistics
- Blocked Inventory (Items stuck in transit)
- Physical quality check and re-packaging of returned items
- Increased probability of damage to fragile items, and hence more money spent in shipping them
- Operations costs in processing these orders
We took the time out to check out the RTO numbers and their true impact on business. Here’s what we found– in case of COD orders, the percentage of RTO orders can be as high as 40 percent!
So, how does this impact the merchant?
With e-commerce and internet advertising booming, merchants have begun to experience a large influx of orders online. This does not, however, translate to all of them being genuine.
When it comes to small businesses, merchants waste a lot of money in the process of “confirming” the order. This means that they will have to send out communication from the company in the form of emails, IMs and such to double-check whether the customer actually intends to make a purchase.
This can prove to be an expensive exercise for merchants to tackle. We took the time out to speak to a few merchants on how much they spend on communications and we found out that they shell out a shocking INR 5-10 per communication!
Calculating risks of inefficiency
For a merchant to trigger the communication activities for the customer in question, it’s important to first calculate the risks involved. The best way to approach this problem is to profile your customers and observe their actions on your website.
This can be consolidated into a “risk score” of sorts– an accessory that lets you determine the authenticity of your customer’s behaviour. A risk score can be modelled from a variety of data points, namely, the number of orders placed, attempts to cancel, cancelled orders, etc. This will help map out the personality of the user in ways that can supercharge the verification process.
In a fraud detection software like Thirdwatch, EVERY user is assigned a risk score, which is based on the historical data across websites. This risk score is displayed at the decision-making crossroads, where the merchant is expected to take the order forward or reject it.
Devising a solution to keep track
When the basic cost of communication is higher than ever and fraud shows no signs of stopping, what is the way out?
Introducing “Buyer Action” from Thirdwatch- a product feature that solves all the above problems seamlessly. With buyer action, merchants can now track the status of confirmation with just a click. Allow us to explain that in detail.
As we mentioned earlier, merchants don’t have it easy. Imagine having to manually filter out risky orders and have a team of people call them up individually to confirm every order in question. This can be extremely monotonous and time-consuming, not to mention incurring the expenses involved.
The “Buyer Action” feature on the Thirdwatch dashboard solves the solution with a single button instead. The merchant simply has to click on “Request confirmation” and communication is automatically triggered in various forms. The different forms of confirmation that are sent out are:
- IVR call
- Email confirmation
A message is sent along with a link to the order page, where the customer can choose to accept, modify or cancel items altogether. This feature also allows the customer to remotely make changes, leaving no place for time constraints or miscommunication.
With this feature, not only is the humongous task of following up completed in mere seconds but manual intervention is also significantly reduced.
The true impact of Buyer Action
With RTO rates up to 40% for e-commerce merchants on an average, one can only imagine the efforts that go into reducing it. For smaller merchants, it can be worse as they are required to deliver products blindly to build credibility.
Thirdwatch aims to make life easier for e-commerce merchants in terms of effort, credibility and human intervention. With an advanced Machine Learning algorithm, Thirdwatch helps detect fraud orders, impulse purchases, non-deliverable addresses and flag risky transactions in real-time to improve profitability.
With a feature like Buyer Action set in place, the merchant does not have to worry about intervening into the specifics of every order.
What’s better? Buyer Action helps save a lot of money, too!
Buyer Action helps merchants cut costs while communicating with the customer and provides a seamless structure in place for any last-minute follow-ups, all while making sure that customer satisfaction isn’t compromised. With a smooth automation mechanism set in place, you can be sure to focus on the important things, while leaving customer delight to us.
So, are you game? Join hundreds of merchants in using Razorpay Thirdwatch today and scale your business like never before!