Ryan Kemp, director of retail at TransUnion comments on the latest ONS Retail Sales Index: “Overall, the volume of total retail sales in the three months to May increased by 1.6%. Whilst that’s positive news given the current economic uncertainty in light of the protracted Brexit negotiations, a closer look at the figures reveals that it’s online sales that continue to drive growth – with an increase of 8.2% – whilst the department stores struggle, with a fall of 0.9% over the quarter. This is unsurprising, as the problem for retailers with physical presence is the cost to serve, with high business rates being a big barrier to retailers investing in high street space.
“In order to stay in the game, retailers need to continue to innovate digitally, with a particular focus on increasing value and convenience, and delivering a personalised experience. In the recent 2019 Digital Retail Innovations League, artificial intelligence (AI), payments, robotics and personalisation came out top of the pile in terms of what retailers should be focusing on. However, with that innovation and drive towards digital, there comes an increase in cybercrime.
“With retail and consumer fraud up 27% in 2018, it’s essential that retailers are doing all they can to understand their fraud rates and reduce any risk by utilising many of the solutions on offer. These can range from simply checking the device, email or address through to validation of many other characteristics and or behaviours, all in real time.
“There’s also new legislation coming into play that will be a welcome tool in protecting customers and combatting fraud. As of 14 September, PSD2 regulation will require Strong Customer Authentication (SCA), which means verification for online payments of more than €30. This will require big changes to processes and technology at retailers, banks and payment service providers.
“If customers don’t approve a transaction by entering a code via text message from their banks, or scanning their fingerprint on their mobile device, they may not be able to make the purchase. This could result in cart abandonment and a loss of sales and the implications of that are huge. That being said, there is a real competitive advantage potential for those who can be first to get it right; establishing a smoother customer experience whilst mitigating fraud at the same time.”