The holiday season has come to signify not only a time of celebration among family and friends - it's also usually a period of joy for retailers. This year, however, the lagging economy threatens to dampen everyone's holiday spirit, and retailers who depend on a large holiday season sales boost should prepare for a much smaller increase: Forrester Research analysts have projected that sales will grow at just 12% this holiday season, compared to a 21% jump last year.
But even achieving this number will be challenging given the latest comScore report. comScore notes that US retail e-commerce grew just 1% year-over-year in October, compared to 19% year-over-year growth the previous October, and marks the sixth consecutive month of slowing growth.
Add to that rather disconcerting picture a backdrop of increasing fraud. Gartner security analyst Avivah Litan reports that in recent months, banking clients have been warning her of a spike in fraud, much of it based on the use of stolen financial data. "There's been a marked increase in the number of attacks and the number of successful fraud attempts," Litan, who plans to publish a formal report in December, recently told Forbes.com. "This is the busiest my practice has ever been."
If the current economic crisis and spike in fraud has the impact it threatens to, online retailers will need to find new ways to maximize the revenue from what is looking to be a tough holiday season. It is, however, often a fine line to walk between finding new ways to maximize profits and retaining customer loyalty. Retailers should be looking to cut out fraudulent holiday purchases as one of the best ways to boost revenues while keeping prices reasonable - and customers happy.
There are a number of ways retailers can cut down on fraud for the holidays, but it will be important to factor in measures that ensure "good" customers still have a pleasant, hassle-free shopping experience. Because especially this year, the only online shoppers who need to feel more of a pinch are the fraudulent ones.
