What Will This Holiday Shopping Season Look Like?

Given the ongoing COVID-19 pandemic, the upcoming holiday shopping season will undoubtedly be unique. There are plenty of customers new to the e-commerce world, some of who will opt to keep their holiday spending online. Others will flock to in-store pickup of online orders. Merchants can build customer trust by being transparent about additional costs and delivery timing, while working hard to offer customers the seamless and secure buying experiences they demand.

To further discuss what this holiday season could look like and what merchants should do to prepare, PaymentsJournal Editor-in-Chief Ryan McEndarfer spoke with Rafael Lourenco, Executive Vice President and Partner at ClearSale

How the holiday season could unfold

E-Commerce has been gaining adoption for some time, but COVID-19 acted as a catalyst to drive an influx of shoppers online out of sheer necessity. As state-imposed shutdowns unwind and stores begin to re-open, some customers will revert to their offline shopping behavior—but many won’t.

Rather, they have grown accustomed to and are satisfied with the convenience that e-commerce shopping provides. Even so, there are challenges associated with the proliferation of new online buyers. First, merchants do not have stored data points or personally identifiable information (PII) for these customers. This can create a lag in approving or declining transactions.

On top of that, “new buyers are not as used to the shipping costs and timelines as someone who has been shopping by e-commerce for the last 10 years,” explained Lourenco. “We are dealing with a new type of customer and that is very important to understand when it comes to the holiday season.”

Accommodating new buyers is key

To entice new e-commerce buyers into coming back, merchants need to make the shopping experience as comfortable and seamless as possible. An important component of doing so is building trust, which Lourenco described as “the key to having a successful holiday season.”

But because of the pandemic, e-commerce simply isn’t running as smoothly as it did before. Shipping timelines have increased, causing delivery delays that disproportionately impact small and medium businesses that rely on major carriers. Additionally, the holiday-related shipment surge is expected to come with hefty fees, which is a pain point for merchants and customers alike.

By being as upfront and transparent as possible about the new additional costs, trust can still be built. It is also better for retailers to under-promise and over-deliver in terms of the shipping experience. For instance, a customer will be more pleased with a four day delivery time if they were expecting to wait five days than they would if they expected to wait three.

Customers are also less likely to make an online purchase if they feel like the shipping fee is too high. The lower an average order value (AOV) is, the greater impact shipping costs have. For example, a $5 shipping fee for a $10 product may seem excessive, while that same fee for a $500 purchase feels like a great deal. Since ticket sizes tend to decrease during the holidays, merchants may want to consider absorbing additional shipping costs into the prices of the sold goods through higher ticket prices.

Anticipate fraud attacks

The spike in sales associated with the holiday season typically results in a similar uptick in fraud attacks. The good news is that the spike in legitimate sales is higher than the increase in fraud, meaning the percentage of fraud attempts based on transaction volume is actually lower than normal. At the same time, it’s the time of year merchants sell the most, making it the time of year with the highest potential fraud losses.

One way to prevent fraud is to lean into automated decision-making and machine learning (ML) to approve or deny transactions. This reduces the amount of manual work needed. Those that are working manually can then work diligently to approve as many transactions as possible, giving consumers the benefit of the doubt, gaining their trust, and reducing false declines. Feeding these decisions into ML algorithms can improve future automated decisions.


The shift to e-commerce is here to stay, and that will trickle into the holiday shopping season. Merchants need to be transparent with customers about how COVID-19 will impact their shopping experience to build trust and retain new online shoppers.

To further discuss what this holiday season could look like and what merchants should do to prepare, PaymentsJournal Editor-in-Chief Ryan McEndarfer spoke with Rafael Lourenco, Executive Vice President and Partner at ClearSale.

Original article at: https://www.paymentsjournal.com/what-will-this-holiday-shopping-season-look-like/