Despite rumblings about the resurgence of physical retail, shoppers spent nearly four times more on the web than they did in stores last year. Consumers of all ages are fully entrenched in e-commerce —and because it’s such a big part of the way they live and shop, they’ve become savvier than ever, according to research from ClearSale.
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“Regardless of generation, they’ve learned how to navigate online and are willing to shop around” in order to get what they want, from the right price to a positive user experience and a large selection, the group’s analysts wrote in a recent report about e-commerce, fraud and consumer experience. According to the fraud management firm, these criteria determine consumer behavior online, from shopping frequency to cart abandonment.
Across generations, free shipping is king. Eighty percent of shoppers said they would wait longer to receive a purchase if shipping was inexpensive or free. Baby Boomers were the most influenced by free shipping (79 percent), with Gen X close on their heels (77 percent). Meanwhile, 71 percent of millennials and 69 percent of Gen Z ranked free shipping second most important on their list, with price taking first place.
While it’s not possible for all retailers to offer the fast, free shipping experience that an e-tailer like Amazon provides through Prime without making sizable operational adjustments, businesses that are serious about their web-based sales should optimize shipping processes to determine opportunities to improve costs and delivery times, the group suggested.
There are also key differences in the channels consumers use to browse and buy. Over the past two years, ClearSale’s research showed a near-even split between mobile and computer shopping (57 percent and 53 percent), but there’s a generational divide in preference that should be considered, the group wrote.
Not surprisingly, Gen Z and millennials gravitate to smartphones and tablets for online shopping, while Gen X straddles the line between mobile and laptops or PCs and Baby Boomers are holding on tight to their computers.
With the younger generations aging into their peak purchasing power, social commerce is “the next frontier” for web-based businesses, ClearSale said. By 2025, online sales driven by social media are projected to exceed $79 billion in the U.S. and $1 trillion across the globe. Over 80 percent of Gen Z shoppers use YouTube on a monthly basis, and a near-equal number turn to Instagram and TikTok. Facebook is still a massive driver of social commerce, with 70 percent of transactions originating on the platform across generational cohorts.
An upswing in fraud
With these avenues for discovery and purchase on the upswing, fraud is also on the rise. In examining the prevalence of such illicit activity tied to social commerce , ClearSale’s research showed that 13 percent of online shoppers across the globe experienced fraud in 2023. About one-fifth of surveyed Gen Z and millennial consumers said they’d been taken for a ride online, while less than 10 percent of Baby Boomers reported being victimized—presumably because they engage less with social commerce.
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According to ClearSale, account takeover fraud is among the most prevalent challenges for e-commerce companies, with data breaches becoming increasingly common. Once bad actors get a hold of consumers’ stolen data, they can commit identity theft using their information and make unauthorized purchases.
This kind of activity doesn’t just harm shoppers—businesses suffer as well, the group said. Fraudulent transactions will result in chargebacks and ultimately lost revenue. What’s more, if a data breach occurs on a retailer’s website, its reputation will almost certainly take a hit. The vast majority (84 percent) of consumers said an online business that neglects to protect them from fraud would lose their business.
Rising risks have made consumers more aware of the importance of fraud protection . In fact, they are willing to sacrifice certain consumer experience features if it means their information will be safeguarded. The report showed that 90 percent of shoppers would prioritize fraud protection over easy checkout—and some are beginning to prize security over price, with 33 percent of those surveyed saying they’d prefer a safe e-commerce experience over a good deal.
With these trends in mind, more online businesses are turning to fraud detection algorithms and machine learning models to keep shopper information safe. While these tools are undoubtedly helpful, ClearSale also said consumers are open to communication from businesses to confirm a purchase as a means of fraud prevention. Eighty-one percent of those surveyed said they appreciate purchase confirmation calls from businesses.
“Obviously, businesses and consumers prefer instant decisions about purchases. However, consumers are seeing the value of an extra set of eyes on suspicious orders,” ClearSale vice president Rafael Lourenco said. “They would rather respond to an SMS or wait for a purchase confirmation over being automatically declined or, worse, being the victim of fraud.”
“By openly communicating with customers about potentially fraudulent activities and seeking their confirmation, businesses foster trust and transparency in their operations,” the report continued. “This helps build stronger relationships with customers based on mutual respect and honesty.”
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